Eternal Energy Sells Select Acreage Interest to Roadrunner Oil & Gas

Eternal Energy has sold its 50% working interest in around 5,951 net acres of oil and gas leases on lands in eastern Utah and western Colorado to Roadrunner Oil & Gas USA.

In connection with the sale, the company retains an overriding royalty on production from the properties at a rate which is equal to the difference between existing burdens of record at the time of acquisition and 80%.

The company will also receive an overriding royalty, calculated in the same manner, on any additional oil and gas leases acquired by Roadrunner in an area of mutual interest covering approximately 2.76 million acres in eastern Utah and approximately 806,000 acres in western Colorado. The term of the area of mutual interest is seven years.

Proceeds from the sale of this acreage totaled $1.19 million, which will be used to bolster the company’s working capital position as well as to fund additional exploration and development activities. The sale is in accordance with the company’s overall strategy of increasing shareholder value without dilution.

The company has also acquired a 5% overriding royalty in petroleum and natural gas licenses covering 45,980 gross and net acres located in southeastern Saskatchewan, Canada, in conjunction with Ryland Oil.