Principal Solar to Acquire Minerva-Rockdale Leases, Wells McapMediaWire -- Principal Solar, Inc. (OTC: PSWW) (“Principal” or “the Company”), a strategic investor in organizations and technologies that support next-generation opportunities in traditional, renewable, and clean energy sectors as well as an
investor in and operator of undervalued petroleum-producing properties, today announced that it has executed a Letter of Intent (the “LOI”) to purchase a controlling working interest in the leases and oil & gas wells along with all of the assets associated with the Minerva-Rockdale Oil Field (located in Milam County, Texas) from Winchester Oil & Gas LLC (“Winchester”) of San Antonio, Texas.
“Principal’s controlling working interest acquisition represents a tremendous potential opportunity for our two companies,” said K. Bryce “Rick” Toussaint, CPA, MBA, Chairman and CEO of PSWW. “We anticipate that Winchester's leases, equipment, and operational expertise combined with our know-how, relationships, and deep capital markets experience stand to transform the storied Minerva-Rockdale Oil Field into a reliable source of increasingly profitable production and revenue.”
The leases included in the LOI cover approximately 11,000 gross acres and 936 total production and disposal wells. Purchased assets include 657 pump jacks, 48 tank batteries, and 2.3 miles of pipeline.
Production and Potential Upside
Principal’s due diligence to date indicates that current production stands at approximately 200 barrels per day, and of the 936 total wells included in the LOI, 74 are currently producing from the shallow (1,000-1,500 foot deep) Navarro A & B formations. The remaining balance are shut-in, non-producing wells that will require the development, funding, and implementation of a workover program to return to production status. The Company anticipates the drilling of additional wells to be relatively inexpensive and involve relatively low risk.
“The Minerva-Rockdale working interest acquisition offers truly remarkable upside potential to Principal, its partners, and its stakeholders,” said Anthony Lerner, Principal Solar’s Chief Operating Officer. “A recent engineer’s report* indicates total proven reserves of approximately 4,102,680 barrels, valued at approximately $116,000,000 today. With a substantial capex budget expected to be in place by the closing date of the LOI, we plan to return 100-120 of the non-producing shut-in wells to full production status, which we anticipate will double or triple production in the first 9-12 months.”
The Minerva-Rockdale Oil Field (“MROF”) was discovered in 1921 and was once one of the largest oilfields in Texas. Prior to 1950, MROF produced 4,000,000 barrels of oil; total production from August 2014 to today stands at 481,000 barrels. As indicated in the engineer’s reserve report*, the MROF remains a steady producer with significant reserves of oil yet to be recovered.
Principal plans to fund the acquisition via a combination of restricted stock and the assumption of some debt, and under the terms of the LOI, the Company has the right of first refusal to purchase the energy assets accumulated from Winchester and/or its joint venture partners.
https://newsdirect.com/news/principal-solar-to-acquire-minerva-rockdale-leases-wells-and-assets-246693302