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Mining Oil Signs Letter of Intent to Acquire Sterling Exploration & Production Co., LLC, and Yazoo Pipeline Co., LP

October 2, 2008

HOUSTON, Oct. 2 /PRNewswire/ — On September 26, 2008, Mining Oil, Inc. (the “Company”) entered into a letter of intent which modified prior agreements and provided for the acquisition of 100% of the equity interests of the principal owner of Sterling Exploration & Production Co., LLC, a Texas limited liability company (“Sterling”), Yazoo Pipeline Co., LP, a Texas limited partnership (“Yazoo”), and Matagorda Operating Company, a Texas corporation, for an undisclosed sum of cash and restricted common stock of the Company. Matagorda Operating Company is the general partner of Yazoo and the manager of Sterling. These entities will become wholly-owned subsidiaries of the Company.

In January 2008, the Company had signed a letter of intent with Sterling and Yazoo to acquire 65% of the assets of the respective companies. This new letter of intent provides for the acquisition of 100% of the equity interests in both Sterling and Yazoo. The transaction is expected to close in the fourth quarter of 2008 after completion of the financial statement audits of Sterling and Yazoo.

Van Levy, Chairman and Chief Executive Officer of Mining Oil, says, “The Sterling and Yazoo assets provide Mining Oil with several significant benefits. First of all, we will receive a base level of cash flow from both reserves and pipeline assets acquired. Secondly, our reserve base will increase by about 270% with conservatively booked reserves prepared and issued by Netherland Sewell & Associates. Thirdly, these acquisitions provide us with geographic balance to our existing onshore asset base. Finally, Mining Oil will be provided with a host of excellent low-risk drilling opportunities from both the proved undeveloped drilling inventory, as well as substantial un-booked drill sites in Matagorda Bay and High Island.”

Mr. Levy further added, “With Yazoo’s solid infrastructure of over 100 miles of pipelines, 10 existing production platforms, and about 10,500 net acres of land, Mining Oil should experience lower finding and operating costs that could translate into higher economic returns. As such, we expect a compressed cycle from investment dollars spent to actual cash flow. Also, these infrastructure investments will position Mining Oil to make several strategic ‘tuck-in’ acquisitions in the future. Finally, through this transaction, we will acquire significant management and engineering experience in several new and exciting core areas.”

Sterling holds oil and natural gas properties in shallow waters (e.g. 7 to 20 foot depths) located along the Gulf of Mexico coastline in bays and other offshore areas in Texas. The leases for the properties were granted by the State of Texas and are located in the areas known as High Island and Matagorda Bay. Sterling owns 10 production platforms with an estimated replacement value of $10.7 million in the areas under lease which have approximately 40 producing wells.

The oil and gas properties were valued at an SEC PV-10 value of approximately $50.1 million based on the reserves estimates issued by Netherland, Sewell & Associates, Inc. (“NSA”), a recognized international petroleum engineering firm based in Dallas, Texas. The SEC PV-10 estimates were based on 2007 year-end commodity prices ($92/bbl for crude oil and $6.79/mcf for natural gas) on estimated future net income discounted at 10% for Proved Developed and Proved Undeveloped reserves as of December 31, 2007. Approximately 80% of Sterling’s properties were classified as “Proved Undeveloped” by NSA. These properties will require approximately $15 million to drill development wells to convert these reserves into the “Proved Developed” status.

Yazoo owns approximately 100 miles of pipelines in the Matagorda Bay and High Island areas in Texas. The pipeline properties were determined to have a replacement value of approximately $132 million based on an appraisal issued by Baker & O’Brien, Inc., a recognized pipeline engineering firm based in Dallas, Texas. This pipeline system provides transportation for several oil and gas producing customers in the High Island and Matagorda Bay areas. The pipeline system is highly under-utilized, and management believes that the market value is considerably less than the replacement value.

Upon closing of the purchase, the Company will enter into an employment agreement with the principal owner of both Sterling and Yazoo which will provide for an annual salary along with customary benefits and other incentive programs.

The Company has retained Global Hunter Securities, LLC, an international investment banking firm based in New Orleans, Louisiana, as the Company’s financial advisor and placement agent for the issuance of debt. The Company intends to raise approximately $40 million of debt with the proceeds to be primarily for recompletions and low-risk drilling opportunities on the acquired properties and other acquisitions.

At the completion of the acquisitions and financings, the Company expects to incur approximately $40 million in long term debt, including the assumption of certain obligations. Additionally, the Company estimates that it will have approximately $24 million in working capital, primarily in the form of cash and cash equivalents, after the close of its acquisitions.

Mining Oil, Inc.

CONTACT: Van Levy, Chairman and Chief Executive Officer, or George R.Koo, Executive Vice President and Chief Financial Officer, both of Mining Oil,Inc., +1-713-658-0370




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