U.S.-based exploration and production company Supernova Energy Inc. said Oct. 23 it signed a letter of intent with a privately held Kentucky corporation to acquire oil leases in Kentucky.
The package includes six leases with 100% working interest and associated net revenues interests that vary for each lease. The six leases contain 20 fully equipped and operational wells on more than 1,200 acres of leased land. Also included in the lease package are partial interests in four additional existing wells on two separate leases. The net revenue interest for three of the wells is about 30%, and net revenue for the remaining well is about 20%.
"With this proposed deal, not only are we acquiring existing production from 24 existing wells and a lot of related equipment assets, but we [are] also acquiring over 1,200 acres of potential upgrade, improvement, and drilling opportunities. We look forward to closing the purchase as quickly as possible and moving forward with our plans to boost our production," Supernova Energy CEO Kevin Malone said.
Closing of the transaction is subject to customary terms and conditions, including completing due diligence by Supernova Energy, securing financing, and negotiating and executing definitive agreements. If definitive terms have not been reached within 90 days, the letter of intent will expire.