Epic Energy Resources Inc., Houston, (OTCBB: EPCC), a provider of engineering, management consulting and training services, has sold its interest in a low-volume gas field in central Kansas to an undisclosed partner for approximately $3.8 million.
The partner will assume all debt associated with the field as well as operating expenses in exchange for Epic's interest in the field. In addition, a third party has signed a farm-out agreement in which Epic will receive a 3.75% net profits interest, up to a maximum of $500,000, in production from new wells drilled in the field.
In December 2006, Epic acquired a 100% working interest (approximately 82% net revenue interest) in 28,600 acres in Rush County, Kansas. Assets included 58 producing gas wells with total proved reserves year-end 2006 of 3,717 barrels of oil and 2.8 million cubic feet of gas.
Epic chief executive Rex Doyle stated, “This is another important step in our continuing effort to improve our capital structure by reducing debt and divesting of non-core assets. This transaction will reduce our debt by over $3.8 million while also providing up to $500,000 of income from the farm out agreement. I am pleased that the Epic team has been able to structure this type of positive transaction in a tough commodity and credit environment."
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