SAN FRANCISCO, April 7, 2011 /PRNewswire/ -- GeoPetro Resources Company (NYSE Amex: GPR) ("GeoPetro", "we", "our" or the "Company") is pleased to announce that its wholly-owned, indirect subsidiary, Madisonville Midstream LLC ("MML"), entered into a Purchase and Sale Agreement (the "Agreement") on April 1, 2011 with Peregrine Midstream Partners LLC ("Peregrine") whereby MML has agreed to sell certain idle equipment ("assets") at its Madisonville Treatment Plant located in Madisonville, Madison County, Texas for $8,750,000.
Peregrine's plan in acquiring the assets is to integrate them into an underground storage project that a Peregrine subsidiary is developing in Wyoming.
The basic terms of the Purchase and Sale Agreement are as follows:
- GeoPetro's wholly owned indirect subsidiary, Madisonville Midstream LLC, will sell certain idle equipment at the Madisonville Plant to Peregrine for $8,750,000 (the "Purchase Price").
- Peregrine will pay the Purchase Price to the Company in the installments as follows:
- The first installment of $150,000 was tendered upon execution of the PSA. This first installment is non-refundable except for a material breach of the Agreement by the Company.
- The second installment of $8,600,000 (the "Closing Payment") is to be tendered on or before May 31, 2011.
- If regulatory approval to develop an underground gas storage project has not been received by Peregrine by May 31, 2011, Peregrine has an exclusive option to extend the due date of the Closing Payment up to 45 days to July 15, 2011.
- If Peregrine exercises this option to extend the due date, then Peregrine shall pay an option payment of $150,000. This payment is non-refundable except in the case of a material breach of the Agreement by MML.
- If the Closing has not occurred on or prior to June 15, 2011, Peregrine shall make a payment of $2,315.07 per day to MML for each day after June 15, 2011, until the Closing or the termination of the PSA.
The sale of idle equipment at the Plant does not impact current treatment capacity to treat production of natural gas from the Rodessa Formation in the Madisonville Field.
Addressing the sale of idle equipment at the Plant, GeoPetro's President & CEO, Stuart J. Doshi commented, "We are pleased with the transaction as the equipment being sold represents assets that are idle and non-income producing. We will have further comments on this Agreement upon the closing of the transaction."
GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California. GeoPetro currently has projects in the United States, Canada and Indonesia. GeoPetro has developed a producing oil and gas property in its Madisonville Field Project in Texas. Elsewhere, GeoPetro has assembled a geographically-diversified portfolio of exploratory and appraisal prospects.
This news release contains forward-looking information. Statements contained in this news release relating to future results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may involve known and unknown risks involving market prices for natural gas and oil, economic and competitive conditions, regulatory changes, resource estimates, estimates of proved and probable reserves, production forecasts, geological and engineering uncertainties, potential failure to achieve production from development drilling projects, capital expenditures and other risks and uncertainties, which may cause the actual results to be materially different from those expressed or implied by such statements. Additional risk factors include, among others, those described in the Company's Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. We do not have any intention or obligation to update forward-looking statements included in this press release after the date of this press release, except as required by law.
No stock exchange or regulatory authority has approved or disapproved of the information contained herein.
SOURCE GeoPetro Resources Company