SACGASCO Acquires Equity, Control of Natural Gas Prospects

Sacramento Basin-focused conventional gas producer and developer, Sacgasco Limited confirmed the acquisition of additional equity and the securing of operatorship in its Dempsey and Alvares conventional natural gas prospects in the Sacramento Basin, California.
 
Sacgasco has signed a letter of intent (‘LOI’) to acquire an additional 35% equity in, and Operatorship of its flagship Dempsey and Alvares Prospects through the acquisition of private company Peregrine Limited (‘Peregrine’). Peregrine and its shareholders have a track record of success investing in the oil and gas sector. Its major shareholder Mr Paddy Mahon is CEO of Geneva based Hereford Securities and Management S.A.
 
As consideration Sacgasco will issue 32 million fully paid shares to Peregrine shareholders. Upon success at Dempsey, Sacgasco will pay Peregrine a bonus payment of AUD$3 million derived from future revenue from gas sales from reservoirs beneath the producing Forbes Formation. Such cash flow will be net of royalties and lease level costs attributable to 17.5% working interest (50% of acquired WI) in the first Dempsey Prospect well.
 
The acquisition is subject to normal due diligence by Sacgasco, signature of formal sales and purchase agreement, and Sacgasco shareholder approval to issue related shres. Following shareholder approval, Peregrine’s representative Mr Philip Haydn-Slater is expected to join the Sacgasco Board.
 
Sacgasco’s Managing Director Gary Jeffery commented: “This transaction adds considerable value to Sacgasco as it gives us majority Working Interest and Operatorship of two very significant and drill-ready multi-Tcf conventional natural gas prospects in California.
 
“Now that we have control of the drilling of these very compelling conventional natural gas prospects, we are 100% focused on drilling the +1 Tcf gas Dempsey-1 prospect as soon as possible, with the Company targeting early 2017 for spudding. Options will also be considered for the Alvares Prospect which has a best-estimate Recoverable Prospective Resources 2.4 Tcf gas.
 
“This transaction significantly widens SGC’s funding options for the planned drilling of the Dempsey 1 well, and we are in advanced discussions with a number of parties interested in farming in or funding the drilling of Dempsey, and also Alvares.
 
“We look forward to welcoming our new shareholders to Sacgasco and Philip Haydn-Slater to the SGC Board. We expect Philip will significantly assist in increasing Sacgasco’s visibility in the London capital markets.”