Privately held, Houston-based Alamo Resources LLC plans to acquire interests in oil and gas assets in Eddy County, N.M., from Doral Energy Corp., Midland, Texas, (OTCBB: DRLY) for up to $8.875 million.
The purchase price includes a payment of $5.875 due at closing and an additional $3 million in payments depending on success in meeting production goals.
Under the proposed agreement, Alamo will purchase 50% of Doral's interests in the assets, which are located in the Permian Basin. The two companies will jointly develop the properties, with Doral remaining operator.
Closing is expected to take place by March 1.
Doral will use proceeds from the sale to repay its bank debt. The company says it has been in negotiations with Macquarie Bank Ltd. to extend its current forbearance, which was set to expire Jan. 29.
C. K. Cooper & Co. was financial advisor to Doral Energy.
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