Pacific Energy Development signs acquisition agreement with Dome Energy AB
PEDEVCO Corp. d/b/a Pacific Energy Development today announced the entry into an Agreement and Plan of Reorganization (“Merger Agreement”) with Dome Energy AB whereby the Company will acquire all the US oil and gas assets of Dome.
This transformational business combination with Dome Energy is expected to:
- Pay off existing senior debt of the Company
- Lower cost of capital with a 3.75% bank credit facility
- Provide drilling capital
- Provide additional capital to buy back Company stock
- Provide an estimated PV10 of 1P reserves of approximately US$280 million
- Increase production to an estimated 3,300 BOE/D at closing
“We are in an unprecedented time in the energy sector with crude prices falling over 50% since the summer of 2014,” stated Mr. Frank C. Ingriselli, Chairman and Chief Executive Officer of the Company. “Unlike many companies, even with oil at its current price per barrel, we have ample quality drilling inventory that we can develop with estimated IRR’s exceeding 40%. This acquisition of the Dome Energy assets is a great opportunity, at the right time, to grow and strengthen our position as a company. We have laid the groundwork for access to additional cash flow, production and reserves,” continued Mr. Ingriselli.
“PEDEVCO’s management team acted quickly and decisively to significantly increase the size of the Company and seek to obtain access to cheaper sources of capital that we believe will enable us to not only survive, but thrive as we ride out this cycle. We have a long runway of proven undeveloped, unconventional, and now with the combination with Dome Energy, low-cost conventional drilling and workover locations, which we plan to organically develop with the goal of achieving 10,000 BOEPD, increasing our asset base, and building shareholder value. In my 36 years in this industry, identifying synergistic opportunities — and moving swiftly and decisively to capitalize upon them — is what I have seen successful and enduring oil and gas companies do. This is the path we are following.”
Pursuant to the terms of the Merger Agreement, the PEDEVCO shareholders will have 36% of the combined company, which we believe will be accretive to our shareholders. Unless otherwise agreed upon by the parties, if this merger has not closed by November 19, 2015, either party may terminate the Merger Agreement.