Armada Oil Inc. (OTC: AOIL) entered into an agreement, for a third tranche of capital related to a recent transaction, with private energy investment group Gulfstar Resources LLC, the company said May 19.
The recent transaction was an asset reallocation, the company added.
The total net funding for the third tranche is about $2 million, the company said, noting that upon full funding, Gulfstar will have acquired an additional 12.6% of TNR Holdings LLC. Armada Oil’s ownership interest in TNR Holdings will be about 27%, the company added. The tranche is scheduled to close June 15, and at that time Armada should also have reallocated the bulk of its assets to the Midcontinent while retaining production in south Louisiana, the company said.
The third tranche will provide capital for the Bear Creek #1, an initial test well on Armada’s farm-out acreage in Carbon County, Wyo., the company said. Drilling the Bear Creek #1 will allow Armada to assess “quality and potential” of the project acreage in the Niobrara Shale, the company added. The company forecast that potential reserves, per well, from the Niobrara Shale would be between 300,000 and 500,000 barrels, it noted.
Dallas-based Armada Inc. acquires and develops domestic oil and natural gas.
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