Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Northcote & North American Petroleum to acquire Aminex’s Shoats Creek project

“Following our extensive due diligence on the project, Northcote and its partners believe that a systematic development programme will offer substantial production upside," said Northcote CEO Randy Connally.
Northcote & North American Petroleum to acquire Aminex’s Shoats Creek project

Northcote Energy (LON:NCT) has agreed to acquire a stake in Aminex’s (LON:AEX) Shoats Creek oil field, in Louisiana, via a series of related transactions.

Springer Oil & Gas has struck a deal to acquire 100% of Shoats Creek, and concurrently Northcote will acquire from Springer 70% of the project before farming-down half of its interest to ISDX-listed peer and partner North American Petroleum (ISDX:NAP).

For Aminex the transaction fits its strategy to focus on assets in Africa. Through the transaction the company will receive US$5mln, comprising US$150,000 of cash, US$350,000 of Northcote shares and a revenue share capped at US$4.5mln.

Northcote will receive US$175,000 of cash from NAP as part of the deal.

Once the dust settles on the transaction Northcote will be the operator of the project, with a 35% stake. NAP will own 35% and Springer will retain 30%.

Springer’s participation will help fund the early development of the Shoats Creek, said Northcote chief executive Randy Connally.

Connally also pointed to the success of New York listed Midstates Petroleum, on a contiguous field, as an encouraging factor for the partner’s high expectations for the Shoats Creek project.

"The Shoats Creek transaction provides Northcote with an opportunity to expand into a new, highly prolific US onshore oil and gas region with partners equally focused on exploiting an oilfield with great potential and a production history estimated at over 2 million barrels,” he said.

“Our partnership with Springer Oil & Gas, LLC and NAP provides the substantial portion of initial capital expenditures to facilitate early development of the project, ensuring that the addition of this property to our portfolio will not divert Northcote's financial resources from our ongoing 2014 work programme in Oklahoma.

Connally adds: “This property is attractive due to the multiple pay zone opportunities present, as well as the exploitation potential from existing well bores.

“Following our extensive due diligence on the project, Northcote and its partners believe that a systematic development programme will offer substantial production upside from near term exploitation of existing well bores and longer term from the multiple drilling locations remaining in the Frio, Cockfield and the deeper Wilcox formations.”

Shoats Creek was first discovered back in the 1960s, and though various periods of development 22 wells have been drilled on the property. It currently produces oil from one well.

The partners plan to commit US$1mln of development capital to the project within the first twelve months.

Initially US$600,000 will be invested to start operations. Northcote and NAP will each provide US$75,000, whilst Springer will put in US$450,000, and a further US$400,000 of funding will be split between Northcote and NAP.

Subsequently, Northcote will be responsible for funding 50% of the next US$900,000 that will be invested in the projects. Funding thereafter will be on a pro-rata basis.

Investments in Shoats Creek are not expected to be made until 2015, allowing Northcote to concentrate its resources on its ongoing plans in Oklahoma.

View full MYN profile View Profile

Mayan Energy Timeline

Related Articles

oil and gas operations
March 21 2018
Talks are underway with a subsidiary of Oman's Zubair Corporation.
oil and gas operations
June 04 2018
“I believe that the ENEO issue will be solved as VOG management has prioritised this matter and is focused on achieving a result in the shortest possible timeframe,” chief executive Ahmet Dik
oil and gas operations
June 08 2018
Sound Energy is advancing with multiple work-streams which means a number of value catalysts are coming down the line for investors.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use