Arete Industries, Inc. Announces Acquisition of Oil & Gas Property
WESTMINSTER, Colo., Aug. 25 /PRNewswire-FirstCall/ — Arete Industries, Inc. (Pink Sheets: ARET) announces that the Company received a letter of intent to purchase oil and gas properties in Wyoming, Colorado, Kansas, and Montana from Denver based oil & gas and operating companies for $21,000,000 in cash.
The wells being offered by the Denver based oil & gas company total 243 wells, including 46 operating wells (PDP) and 197 PUDS (PUD). The current operating wells at today’s oil and gas prices will generate cash flow of approximately $7,000,000 a year or a monthly cash flow of $585,000. Arete purchased the TOP Gathering System located in Campbell County, Wyoming in September of 2006. This pipeline is connected to oil & gas properties in Wyoming and is currently transporting approximately 900,000 Mcf of gas per day for the wells being purchased and is cash flowing from its operations. The pipeline has capacity of three times as much gas as is presently being delivered, based on current compression, and developing the present leases would help fill that capacity. The purchase of the pipeline is part one of Arete’s four part program of merging, purchasing, developing, and acquiring operations in the oil & gas industry. The financing of the project is being coordinated by First Diversified Financial Services, Inc. of Houston, Texas. The loan will be a two year term loan for $27,000,000 that includes $21,000,000 for the acquisition and the remaining $6,000,000 for the costs of the loan and drilling in the next 18 months. We plan to complete the acquisition by early fourth quarter.
We plan to complete all filing for Arete during the third and fourth quarter and thereafter begin the process for the listing on the OTC BB. “This has been a long time coming and we have worked very hard to make this happen. We had problems with the pipeline early on but it is performing very well for now and we expect this acquisition of assets to provide us the ability to continue to execute our plan presented in mid 2006,” stated Charles Gamber CEO of Arete Industries, Inc.
About the Company
Arete Industries, Inc. is a publicly traded holding company. The Company is the operator of a gas gathering system and is in the process of acquiring gas and gas properties in the southwest region of the United States.
Statement as to Forward-Looking Statements.
Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other “forward-looking statements” within the meaning of the federal securities laws. Any such projections or statements reflect Arete’s current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, Arete’s inability to meet the conditions to acquiring its current business including providing financing to provide for servicing current and new contracts; unexpected difficulties encountered in the investment market, competition, government regulation or other action, the ability of management to execute its plans to meet its goals and other risks inherent in their businesses that are detailed in their Securities and Exchange Commission (“SEC”) filings.
Arete Industries, Inc.
CONTACT: Charles Gamber, CEO of Arete Industries, Inc., +1-303-652-3113,firstname.lastname@example.org
Web site: http://www.areteindustries.com/