Gale Force Petroleum Inc. (TSXV: GFP, OTC: GFPMF) entered an agreement to sell an 81% working interest in some Texas properties, the company said July 24.
The company’s Texas Reef properties in Henderson and Anderson counties, will be sold alongside a 90% interest in a four-mile natural gas gathering system for US$5.9 million, the Toronto-based company said.
The unidentified purchaser is a “private [exploration and production] E&P operator” working in the southern U.S., Gale Force said, adding that the purchaser drilled eight wells--six vertical and two horizontal--near the Texas Reef properties.
The transaction is scheduled to close Aug. 22, Gale Force said.
The net proceeds should reduce the senior bank facility by $2.5 million, the company predicted, adding that they should also pay off outstanding subordinate notes and leave about $2.5 million for capital development programs.
Under the agreement, Gale Force will retain an average 12% working interest and a 3% overriding royalty interest in four producing wells on the properties, the company said.
Gale Force also will retain an average 9% working interest and a 5% overriding royalty interest on its remaining 3,500 undeveloped net acres, the company noted.
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