Verona Signs Agreement to Purchase Strategic Assets
Tuesday, August 19th 2008
Verona Development Corp. announce that it has entered into an agreement to purchase significant producing oil and gas assets in its core producing area of Gainsborough, in southeastern Saskatchewan, Canada.
The principal assets are 16 producing oil wells, of which ten are operated and produce to an operated working interest battery facility. Current production from the assets has averaged over 120 barrels of oil per day during the first six months of 2008. Upon successful completion of the acquisition, Verona will see its oil and gas production rise to over 150 barrels per day and will be in control of the production from most of its working interest assets.
Verona has agreed to pay $10,750,000 in cash for the Gainsborough oil and gas leases, and related assets, pursuant to an Agreement of Purchase and Sale Agreement negotiated at arm’s length with Strand Resources Ltd., a subsidiary of Villanova Energy Corp. of Saskatchewan. Additional financing will be required for the Company to complete the acquisition, which is subject to acceptance by the TSX Venture Exchange. There will be no finders’ fees payable in connection with the proposed acquisition.
The Company believes that there is significant drilling potential on the properties with a multi-well drilling and work-over program planned for the next year. Although closing is not anticipated to occur until the end of August, the purchase will be effective from July 1, 2008, thereby reducing the acquisition price through accumulated cash flow after July 1st.
“We are very fortunate to have negotiated a strategic acquisition at what we consider to be a very attractive price, which will afford significant growth for the company over the next several years,” stated Rod Husband, Chief Financial Officer and Director of Verona Development Corp.