AMARILLO, TX / ACCESSWIRE / November 28, 2017 / Amazing Energy Oil and Gas Co. (AMAZ) ("Amazing," "Amazing Energy," or the "Company") today announced a Letter of Intent to enter into agreements (the "LOI") with JH Fossil Energy, LLC ("JH Energy") to develop Amazing's current holdings in Pecos County Texas, as well as to be acquired assets located elsewhere in Texas.
The agreements will provide JH Energy with an opportunity to acquire a 50% interest in the rights to approximately 70,000 continuous acres in Pecos County, TX, exploiting the Yates, Seven Rivers, Grayburg, Queen, San Andres, Wolfcamp, Woodford, Devonian, and Ellenburger pay zones and 6,600 acres located elsewhere in Texas that Amazing is currently in the process of acquiring. The terms of the LOI call for the parties to negotiate and execute definitive agreements with provisions totaling $39,175 million in consideration flowing to Amazing, including; a $17.5 million capital carry for Amazing for its Pecos County acreage; $5 million for seismic, science, and deep formation testing; and a $3 million capital carry for Amazing for an additional project. In addition, the definitive agreements will include a commitment to utilize Amazing's drilling rigs and associated equipment ("Rigs") for the drilling and development of the Queen pay zone in Pecos County, TX. JH Energy will issue a $5 million prepayment to Amazing to secure use of the Rigs. After such prepayment is expended, Amazing will be entitled to a fixed rate payment for the Rigs going forward, thus providing Amazing a long-term cash flow stream. Upon reaching the total agreed capital carry for the acreage, Amazing and JH Energy intend to fund future development on a 50/50 basis. The LOI calls for definitive agreements memorializing the terms above to be entered into by Amazing and JH Energy on or before March 31, 2018.
"We are pleased to enter into this LOI with JH Energy, a partner with an exceptional reputation of operating assets to maximize profitability," stated Will McAndrew, CEO of Amazing Energy. "The capital commitment from JH Energy will allow us to de-risk the substantial asset while maintaining the upside potential of future development."
"Securing the right to utilize Amazing's Rigs and production equipment under a long-term agreement, helps mitigate capital and development risks for JH Energy," stated Brian Jeans, President of JH Energy.
"We are excited about the opportunity to participate with Amazing Energy in such a large continuous and sustainable acreage position in Pecos County, TX and we look forward to building upon their existing success," stated Hank Jeans, CEO of JH Fossil Energy.
About Amazing Energy Oil and Gas:
Amazing Energy Oil and Gas, Co. is an independent oil and gas exploration and production company based in Amarillo, TX. The Company operates leaseholds in the Permian Basin of West Texas, where it has rights within a 70,000-acre leasehold in Pecos County, TX. The Company primarily engages in the acquisition and exploitation of oil and natural gas properties with a focus on well-defined plays containing stacked pay zones. More information may be found on Amazing Energy's website at www.amazingenergy.com.
About JH Fossil Energy:
JH Fossil Energy, LLC ("JH Energy") is a privately held independent oil and gas company headquartered in Houston, TX with a strategic focus on acquiring and exploiting producing onshore conventional and unconventional oil and gas assets in the Lower 48. The Company targets Joint Ventures ("JV") and Joint Operating Agreements ("JOA") with producers through development with the drill bit by focusing on underdeveloped or producer's non-core acreage. These arrangements permit JH Energy to leverage its capital resources, operations expertise, and commercial aptitude to drive significant growth opportunities. More information may be found on JH Energy's website at www.jhfossilenergy.com
Notice Regarding Forward-Looking Statements:
This news release contains forward-looking information including statements that include the words "believes," "expects," "anticipate," or similar expressions. Such forward looking-statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone's past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof. Information concerning these and other factors can be found in the Company's filings with the SEC, including its Forms 10-K, 10-Q, and 8-K, which can be obtained on the SEC's website at http://www.sec.gov.