Grifco International, Inc. Announces Shareholder Procedures to Receive Warrants for Stake in Net Royalty Interest on Gas Properties
Grifco International, Inc. (Pink Sheets:GFCI) previously announced on December 14, 2006 that it has agreed to spin-off its Precision Drilling & Exploration, Inc. (“PDEI”) subsidiary to Universal Energy Resources, Inc. (“UERI”) in consideration of a stake in the Net Royalty Interest or N.R.I. on gas leases located in Crockett County, Texas.
PDEI is the owner and operator of a land rig and ancillary equipment. Under contract with UERI, PDEI recently completed Adams #12 gas well in Crockett County, TX. This is the first of 208 drill sites in Crockett County, TX which will be spudded by PDEI.
UERI is a private company formed in August 2006 by Jim Dial to act as the operating manager and general partner of gas leases under option in Crockett County, TX and elsewhere. UERI will operate at arms length from GFCI in order to protect its shareholders and assets from the liabilities inherent in the drilling and exploration industry.
About the Warrants
As compensation to its shareholders for the asset separation of PDEI, GFCI will grant to its shareholders of record as of close of business on December 25, 2006 staggered callable warrants (A,B&C Warrants) entitling each warrant holder the right, but not the obligation, to convert into a series of preference drilling participation shares of PDEI. The company is now making the “A” warrant available to its shareholders of record as follows:
Series A Preference Drilling Participation Shares:
GFCI will grant its shareholders as of the Record Date a total of 20,000,000 two year warrants converting on a 1:1 basis into Series A Preference Drilling Participation Shares at a price of $.20 per warrant. Series A Preference Drilling Participation Shares entitle the owner to a mandatory prorata dividend of 33 1/3% on the Net Royalty Income from gas production realized on a total of ten (10) certain gas leases in Crockett County, TX. Warrant Holders must convert in minimum traunches of $400,000 per gas well to be spudded.
The warrants may be subject to a registration statement at the election of the parties at which time they may become “callable”. If the warrants are not registered they will be become “free trading” in 2 years pursuant to Rule 144K.
How to Receive Warrants
Shareholders of GFCI who have proof of physical ownership of shares as of the record date of December 25, 2006, should fax a copy of the front and back of their GFCI share certificate to 936-788-6667 before close of business on March 23, 2007 at 5:00 p.m. Conroe, TX time.
Forward-Looking Cautionary Statements
Any statements that are not based on historical fact are forward-looking statements. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain. We, therefore, caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements.