UHC New Mexico sells assets to Cano Petroleumadmin
UHC New Mexico Corp., a subsidiary of United Heritage Corp., sold its producing and non-producing oil and gas properties in the Permian Basin on March 30 to Midland, Texas-based Cano Petroleum Inc.
The properties were sold for $7 million in cash and 404,204 shares of Cano’s restricted stock. The stock can not be traded for a period of one year from the date of closing. After that, no more than 25 percent of the restricted common stock may be sold during any quarter.
A significant portion of the sale’s cash proceeds were applied to a loan made by Lothian Oil Inc. to UHC in 2005 for development of the Cato San Andres Unit. The loan was secured by the assets that were sold and the remaining balance is secured by the newly acquired stock. As a result, UHC was released from all remaining obligations.
Cano estimates at least $50 million is needed to develop the undeveloped reserves purchased from UHC (NASDAQ: UHCP – News).
Published April 4, 2007 by New Mexico Business Weekly