In more buying news, Denverbased U.S. Energy Corp. entered into an exclusive non-binding Memorandum of Understanding (MOU) to acquire oil and natural-gas producing properties in the Bakken formation of North Dakota.
The MOU is with APEG I Partners, a Texas partnership. U.S. Energy will acquire all of APEG’s interest in 67 wells concentrated in Williams and McKenzie counties. The deal will add highly complementary assets to the U.S. Energy’s existing portfolio in North Dakota.
The purchase will result in the acquisition of approximately 1.1 MMBOE of proved developed reserves (79 percent oil) and 400 BOEPD of current production across 1,600 acres. The purchase price is approximately $17.8 million, consisting of a combination of cash, issuance of U.S. Energy common and preferred stock and the assumption of APEG’s outstanding commodity derivatives.
David Veltri, U.S. Energy’s Chief Executive Officer, said, “This is an exciting transaction for U.S. Energy that, upon closing, will approximately double the company’s existing production base in a highly economic area in which we have significant experience.”