Attached files
| file | filename |
|---|---|
| 8-K - AMERICAN EAGLE ENERGY Corp | v178897_8k.htm |
| EX-10.29 - AMERICAN EAGLE ENERGY Corp | v178897_ex10-29.htm |
| EX-10.28 - AMERICAN EAGLE ENERGY Corp | v178897_ex10-28.htm |
Eternal
Energy Corp. Announces Proposed Asset Purchase and Sale with Ryland Oil
Corporation and a Stock Repurchase Program
Littleton,
Colorado; March 29, 2010 – Eternal Energy Corp. (OTCBB:EERG; “Eternal”, or the
“Company”) announced today that it and Ryland Oil Corporation (TSX Venture
Exchange: RYD.v; “Ryland”) have mutually terminated their letter agreement dated
November 25, 2009, pursuant to which Ryland had previously agreed to purchase
all of the outstanding shares of Eternal’s common stock and, instead, entered
into two new agreements, whereby Ryland, and one of its wholly-owned
subsidiaries, will acquire certain of Eternal’s assets, for which Ryland will
pay cash, issue shares of its common stock, and assign certain of its oil and
gas interests to Eternal. The material terms of the new purchase and
sale agreements are as follows:
|
1.
|
Ryland’s
US-based wholly-owned subsidiary, Rover Resources, Inc., will purchase
Eternal’s ten percent working interest in approximately 700 net acres
located in northern North Dakota for US$1 million in cash, payable at
closing. The transaction is expected to close on April 7,
2010. Ryland currently owns the other 90% working interest in
the acreage; and
|
|
2.
|
Ryland
will acquire all of Eternal’s gross overriding royalty interest in
approximately 264,000 net acres within an area of mutual interest located
in southeastern Saskatchewan for:
|
|
|
·
|
US$3
million in cash, payable on June 1,
2010;
|
|
|
·
|
2,145,883
shares of Ryland’s common stock, valued at approximately CDN$772,500 as of
the effective date of the agreement. The shares will be
restricted from trading in Canada for a period of four months from the
closing of this transaction and will be freely tradable in Canada
thereafter. The shares will not be registered in the United
States and, consequently, will be subject to standard resale restrictions
in the United States; and
|
|
|
·
|
the
assignment by Ryland of its 100% working interest in approximately 4,500
acres located in southeastern Saskatchewan (the “Hardy Prospect”), valued
at approximately CDN$240,000.
|
Upon
closing of the second transaction, 60% of the gross overriding royalty interest
being sold will be placed in escrow pending the receipt of the $3 million cash
payment. If the payment is not received by June 1, 2010, the escrowed
gross overriding royalty interest will revert to Eternal.
The
closing of these transactions is subject to various conditions, including
approval of the transactions by the TSX Venture Exchange.
“We are
pleased to announce the sale of a portion of our North Dakota acreage and the
immediate monetization of our gross overriding royalty interest in
Saskatchewan,” stated Brad Colby, Eternal’s President and CEO. “The
proceeds received from these transactions, including the monetization of our
overriding royalty, will strengthen our working capital position and allow us to
immediately pursue targeted exploration opportunities in the United States and
Canada in areas where significant oil and gas reserves are known to
exist. The Ryland transactions and our exploration opportunities are
intended to maximize value for our stockholders.”
The Hardy
Prospect contains one existing oil well that historically was capable of
producing approximately 100 barrels of oil per day prior to incurring mechanical
difficulties. The Company intends to use a portion of the proceeds
received from the Ryland transactions to fund a portion of the drilling costs of
a new exploratory well within the Hardy Prospect. The Company is
seeking a joint-interest partner to participate in that well and hopes to
commence drilling within the next three months.
The
Company also announced that its Board of Directors has authorized the adoption
of a “stock repurchase program,” pursuant to which the Company may repurchase up
to US$500,000 of its currently outstanding stock at prevailing market
prices. The time period during which the repurchasing activities may
occur will be dependent on future market volume. The stock repurchase
program is subject to various trading restrictions as established in Rule
10(b)-18 of the Securities Exchange Act of 1934.
Mr. Colby
further stated, “The implementation of the stock repurchase program will enable
us to strengthen our long-term financial structure for our stockholders by
capitalizing on a current undervaluing of our stock in the
marketplace.”
2
About
Eternal Energy Corp.:
Eternal
Energy Corp. is an oil and gas company engaged in the exploration of petroleum
and natural gas. The company was incorporated in Nevada on July 25,
2003 to engage in the acquisition, exploration, and development of natural
resource properties.
The
Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
forward-looking statements. Certain information included in this
press release contains statements that are forward-looking, such as statements
relating to the future anticipated direction of the industry, plans for future
expansion, various business development activities, planned capital
expenditures, future funding sources, anticipated sales growth, potential
contracts, and/or aspects of litigation. Such forward-looking
information involves important risks and uncertainties that could significantly
affect anticipated results in the future, and, accordingly, such results may
differ from those expressed in any forward-looking statements made by, or on
behalf of, Eternal Energy Corp. These risks and uncertainties
include, but are not limited to, those relating to development and expansion
activities, dependence on existing management, financing activities, and
domestic and global economic conditions. The company assumes no obligation to
update any of these forward-looking statements.
|
CONTACT:
|
Kirk
Stingley
Chief
Financial Officer
Eternal
Energy Corp.
303-798-5235
|
3