SOURCE: EFL Overseas Inc.
HOUSTON, TX--(Marketwire - Jul 25, 2012) - EFL Overseas Inc. (OTCBB: EFLO) ("EFLO") is pleased to announce completion of its acquisition of Devon Canada's ("Devon") interest in the Kotaneelee Gas Project ("KGP"). On July 18, 2012, EFLO completed its acquisition of Devon's entire right and interest (generally a working interest of 22.989%, with a working interest of 69.337% in one producing gas well) in the KGP.
"Our acquisition of initial interests in the KGP is a substantial milestone," stated EFLO Chairman Henry Aldorf. "It provides the foothold from which we plan to build EFLO into an important supplier of low-cost clean energy. The Kotaneelee gas field, with its conventional and important unconventional resource development opportunities, combined with a 70 MMCFD underutilized gas plant and infrastructure, provide EFLO's operations significant scale and upside."
"We intend to acquire up to a 65% interest in the KGP," added EFLO Chief Executive Keith Macdonald. "We are confident that with the KGP in hand, we can create strong shareholder value from future export opportunities and demand from the undersupplied Yukon marketplace."
More about the Acquisition of Devon's Kotaneelee Assets
The KGP covers 30,188 gross acres in the Yukon Territory in Canada, and includes; a gas dehydration plant (capacity: 70 million cubic feet per day ("MMCFD")), one gas well producing approximately 3.5 MMCFD, one water disposal well (capacity: 6,000 barrels per day), and two suspended gas wells. The KGP has a fully developed gas gathering, sales and delivery infrastructure, airstrip, roads, flarestack, storage tanks, barge dock and permanent camp facilities.
In exchange for Devon's working interest in the KGP, (the "Devon Assets"), EFLO paid CAD$293,700 (USD$289,295) in cash, and indemnified Devon against its portion of the abandonment, reclamation and environmental liabilities associated with the Devon Assets.
Additional Acquisitions of Kotaneelee Interests
On July 7, 2012, EFLO signed a letter of intent (the "Nahanni LOI") with Nahanni Energy, Inc. ("Nahanni") for the acquisition of an additional 30.664% working interest in the KGP (the "Nahanni Assets").
Under the terms of the Nahanni LOI, EFLO will purchase the Nahanni Assets for CAD$400,000 (USD$393,000) in cash, and CAD$4,100,000 (USD$4,030,000) payable in shares of EFLO's restricted common stock. EFLO has also agreed to indemnify Nahanni against its portion of the abandonment, reclamation and environmental liabilities associated with the Nahanni Assets. EFLO anticipates its acquisition of the Nahanni Assets will be facilitated by a tax deferred exchange of shares.
The Nahanni LOI is subject to certain conditions which include, but are not limited to; execution of definitive agreements, and board/shareholder approvals. In connection with the approval of Nahanni shareholders, EFLO has obtained Nahanni shareholder lock-up agreements in quantities it believes will be sufficient to insure the ultimate approval of its acquisition of the Nahanni Assets by the Nahanni shareholders.
EFLO is also pursuing the acquisition of additional working interests in the KGP.
Forward-Looking Statements: This press release includes forward-looking statements as determined by the U.S. Securities and Exchange Commission (the "SEC"). All statements, other than statements of historical facts, included in this press release that address activities, events, or developments that the Company believes or anticipates will or may occur in the future are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which the Company has little or no control. The Company does not intend (and is not obligated) to update publicly any forward-looking statements. The contents of this press release should be considered in conjunction with the warnings and cautionary statements contained in the Company's recent filings with the SEC. There can be no assurance that EFLO we will be successful in completing the Kotaneelee acquisition(s).
ON BEHALF OF THE BOARD OF DIRECTORS
EFL Overseas Inc.