Lonestar I LLC: Company expects that the documentation will be executed imminently10 Feb 2022 09:07
In particular, the Company notes that it has recently signed a non-binding Memorandum of Understanding ("MoU") relating to a potential acquisition of a conventional producing oil and gas asset in the Permian Basin, Texas, USA. The key commercial terms of the potential acquisition as outlined in the non-binding MoU are for the Company to acquire a 75% non-operating working interest in the project for consideration of approximately US$9 million as well as a further US$1.6 million working capital fund, to be paid in cash and 88 Energy shares. The non-binding MoU contemplates that the vendor, Lonestar I LLC, will remain as Operator of the project. 2021 gross production at the project totalled approximately 110,000 BOE, with a planned work program in 2022 expected to increase production. There are no certified reserves available for the project at this stage, and the Company would expect to release certified reserves to the market on announcing a binding agreement to proceed with the acquisition, should the transaction proceed. As noted above, the Company has only entered into a non-binding MoU in relation to this potential acquisition at this stage, with due diligence advanced and final documentation nearing completion. The Company expects that the documentation will be executed imminently. However, execution and completion of the potential transaction is not guaranteed and remains subject to all final documentation being agreed and due diligence completed. There is no guarantee that negotiations will lead to a binding agreement or a completed transaction, or that the final terms will be as set out in the non-binding MoU.
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