First Colombia signs letter of intent to acquire oil and gas assets

First Colombia Gold is pleased to announce it has signed a letter of intent to acquire a 19.5% interest in three private oil companies located in south central Kentucky.

The signed LOI outlines the structure of the transaction, which will give First Colombia a working interest in over 50 active producing wells, ownership in 39 active oil and gas leases covering 5322 acres, as well as full title and ownership to six acres of real estate, which includes a 6800 ft² office complex and maintenance facility. The LOI also includes drilling and operating equipment including two drilling rigs and six completion rigs.

This acquisition will add numerous revenue opportunities and provide cash-flow for operations. The wells being acquired have produced in excess of 8000 bbls of crude within the last year. The acquisition of the interest in these wells will allow First Columbia to offer a wide variety of contract services including drilling, well completion, pump installation, complete oilfield roustabout services, permitting services, salt water disposal, acid treatments, as well as hauling and logistics services to transport the crude from the customer to the refinery. All of these services are currently being offering by the companies we are acquiring an interest in.

First Columbia’s Chief Executive Officer, Dr. Robert Gates commented, “Acquiring an interest in these wells, along with the real estate and other assets included in the transaction, will prove to be a cornerstone in building our oil and gas portfolio. The wells we are acquiring have a solid track record of production, producing already 8000 bbls of crude over the last year which we believe can be increased. This is a transaction that has a history of being a performing commercial property, so adding this to our portfolio should prove to be beneficial to our shareholders.”

Gates continued, “Our goal is to be self-reliant and create a vertical business model. Over the last decade, oil and gas production in the US has skyrocketed, especially since the initiative to reduce America's dependence on foreign oil. With US crude oil prices over US$ 100 per bbl, many larger oil companies are looking at Kentucky and exploration activity is rising. Acquiring an interest in oil and gas properties, and the service capabilities for vertical integration meets our corporate strategy. We are amassing the best properties we can find and assembling the best management team for our stockholders.”

First Columbia’s board and leadership believe that by providing the necessary working capital, and by creating an owner/operator mentality, we can expedite the rework of existing wells and begin new leasing and drilling programs. Preliminary numbers indicate an opportunity to add an additional 22 wells that are already permitted and drilled that can be brought online within the next 60 days.

"We recently announced our plans to acquire a pipeline of oil and gas projects, which we believe have solid potential for building shareholder value. The acquisition of this interest meets that criteria,” commented VP of Merger and Acquisitions Randy Ross. “The companies we are acquiring an interest in have been limited on their oil and gas production, due to lack of capital. Our management and staff have experience in financing public and private companies, and expertise in the extractive industries to build growth in the energy sector through select acquisitions, and improving operating capability.”

Adapted from press release by Hannah Priestley-Eaton

Read the article online at: https://www.worldpipelines.com/business-news/25062014/first_colombia_signs_letter_of_content_to_acquire_oil_and_gas_assets/