OVERLAND PARK, Kan., Aug. 21 /PRNewswire-FirstCall/ -- On August 10, 2007 , EnerJex Resources, Inc.'s (OTC Bulletin Board: EJXR) wholly owned operating subsidiary Midwest Energy, Inc. (Midwest) entered into an agreement with Euramerica Energy Inc. (Euramerica) to begin a development initiative on Midwest's Allen County Kansas Gas City property (Property). In addition to the development initiative, Euramerica has the option to purchase the Property for $1.2 million at any time from January 1, 2008 through March 1, 2008 .
'We are extremely pleased to be working with Euramerica in a development project that will benefit both companies' stockholders,' said Steve Cochennet, chairman and chief executive officer of EnerJex and Midwest. 'We feel we have an agreement that pairs our drilling capability with Euramerica's investment objectives, which is intended to build long-term sustainable earnings growth for both companies.'
The complete agreement was filed with the Securities and Exchange Commission on August 17, 2007 in a Form 10-QSB Filing. Significant details of the agreement include:
-- Euramerica agreed to pay Midwest $524,000 to be used for a well
development program. $250,000 shall be used by Midwest for exploratory
drilling, logging and testing of as many test wells the funds will
allow.
-- Midwest will analyze the test wells, present the results to Euramerica,
and Midwest and Euramerica shall mutually decide on the appropriation
of an additional $250,000, with the goal of putting into production up
to five conventional gas wells before November 10, 2007.
-- On a monthly basis, Midwest shall pay Euramerica 90 percent of the Net
Revenue Interest (NRI) generated from the Euramerica Wells. Midwest
will receive a 10% management fee for its services, which shall be paid
from the NRI from production of any completed Euramerica Wells.
-- Euramerica also has the option to purchase the Property for $1.2
million at any time between January 1, 2008 and March 1, 2008.
-- If Euramerica exercises its option to purchase the Property, Midwest's
10% management fee will convert into a 5% carried working interest in
the Property.
-- At pay-out of the project's total expenses from revenue, Midwest's 5%
carried interest shall convert to a 25% working interest in the
Property.
-- Upon exercise of the Option, Euramerica agreed to pay Midwest $2
million on or before August 31, 2008, to drill, complete and put into
production on the Property as many wells as the funds will allow during
2008. Midwest agreed to continue to act as Operator on a cost plus
17.5% basis for all wells drilled.
Antonio Beccari, president of Euramerica Energy Inc. stated, 'We believe that there is tremendous opportunity in eastern Kansas to create value for shareholders. Euramerica is looking forward to working closely with the EnerJex/Midwest team to add stockholder value through capital appreciation and to build an income stream for stockholders.'
About EnerJex Resources, Inc.
EnerJex is an oil and natural gas acquisition, exploration and development company formed in December 2005 . Operations, conducted solely through Midwest, its wholly owned operating subsidiary, are focused on the mid-continent region of the United States . EnerJex acquires oil and natural gas assets that have existing production and cash flows. Once acquired, EnerJex implements an exploration and development program to accelerate the recovery of the existing oil and natural gas as well as explore for additional reserves. More information on EnerJex and its operations can be found on its website: http://www.EnerJexResources.com.
About Euramerica Energy Inc.
Euramerica Energy Inc. is a U.S. corporation created by the union of two groups of entrepreneurs: an American, active in research and production of traditional energy sources, and a European focused on research and development of renewable energy sources.
The strength of Euramerica lies in the synergy between the American partner's research and plant building capacity and the European partner's management and financial experience.
Using a targeted and well organized strategic plan created by both partners, Euramerica intends to participate in the field of energy sources, both traditional and alternative.
More information on Euramerica and its operations can be found on its website: http://www.Euramericaenergy.com.
Forward-looking statements
Forward-Looking Statement: This press release contains forward-looking statements regarding the agreement with Euramerica Energy Inc. and the respective operations of EnerJex, Midwest and Euramerica. Such statements involve risks and uncertainties, including, but not limited to: any benefits to EnerJex or Midwest from the Euramerica Agreement; results of the exploratory drilling program; ability of the agreement to enhance stockholder value for any of the companies; the continued production of oil and gas at historical rates; costs of operations; delays, and any other difficulties related to producing oil or gas; price of oil and gas; marketing and sales of produced minerals; risks and effects of legal and administrative proceedings and governmental regulation; future financial and operational results; competition; general economic conditions; and the ability to manage and continue growth.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements EnerJex makes in this news release include market conditions and those set forth in reports or documents EnerJex files from time to time with the Securities and Exchange Commission (SEC). EnerJex undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
SOURCE EnerJex Resources, Inc.
