October 30, 2012 – Santa Barbara, California –
Underground Energy Corporation (“Underground”, “UGE” or the
“Company”) (TSX VENTURE: UGE; OTCQX: UGGYF) is pleased to announce
today that it has executed a letter of intent ("Letter Agreement")
with Sovereign Resources LLC (“Sovereign” or “SRL”) whereby it is
proposed that Sovereign will joint venture on and have the right to
earn up to a 75% working interest in Underground’s and its joint
operating partner’s interest in 2,857 gross acres of the Northwest
corner of the Zaca Field Extension Project (“Zaca”) in Santa
Barbara County, California (the "Joint Venture Lands"). UGE owns 80% of the leasehold
interest in the Joint Venture Lands, and a total 10,482 net acres
across its Zaca asset.
Under the terms of the Letter Agreement, Sovereign
will enter into a continuous drilling program to drill a maximum of
seven wells to earn its full working interest. UGE and its minority
partners will be carried for wells one and two, but, thereafter,
will have the right, but not the obligation, to pay their share of
drilling and related costs for each subsequent well. UGE
anticipates drilling to commence within 6 months.
“Sovereign is pleased to joint venture with
Underground Energy,” said Frederic Sewell, President and CEO of
Sovereign. “Based on my knowledge of the local area, Sovereign
decided to invest in Zaca by purchasing Towne Exploration Company
in 2012 with an adjoining lease on which we have drilled an initial
well which we expect to move into production shortly. This joint
venture with Underground enables us to move into contiguous acreage
and extend our land base further. The Sovereign team and I believe
that the upside potential at Zaca is significant and we are excited
at the opportunity to unlock its potential in partnership with
Underground.”
“This joint venture with Sovereign brings in a
knowledgeable industry partner for Underground whose interests and
expertise complement our development plan at the Zaca Field
Extension Project,” said Mike Kobler, President and CEO of
Underground. “The joint venture provides additional industry
validation of the potential of the Zaca asset and the underlying
value of our Zaca acreage. It also accelerates development of
acreage which is peripheral to our seismic and drilling programs to
date, which have focused on the Eastern side of our leased acreage.
Underground is looking forward to working in partnership with
Sovereign Resources and we continue to be pleased with the high
level of industry interest that we are receiving in our assets at
Zaca.”
Other News
TSX Venture Exchange approval has been received for
the non-core asset disposition which was announced on October 11,
2012 and, therefore, that agreement will become effective on
October 31, 2012.
About Sovereign Resources LLC
Sovereign Resources LLC is located in Dallas, Texas and is
currently pursuing projects in Texas and California. Founded in
2008 by Frederic D. Sewell, the company focuses on locating oil and
gas properties with major upside potential, and exploiting
properties with aggressive workover and/or drilling programs to
maximize oil and gas production, cash flow and the property value.
Mr. Sewell has 50 years of experience in the oil and gas industry
and was previously the co-founder of Netherland, Sewell and
Associates, Inc. (NSAI), a prominent, independent petroleum
resource assessment and reserve analysis consulting
firm.
About Underground Energy Corporation
Underground is focused on developing its Zaca Field
Extension Project in Santa Barbara County, California. In total, Underground currently
holds mineral rights on approximately 64,000 net acres of
prospective lands in California and Nevada with an initial focus on
the Monterey Shale in California. Underground is listed on the TSX
Venture Exchange under the ticker symbol “UGE” and quoted on the
OTCQX trading platform under the ticker symbol “UGGYF”. For more
information on Underground, please visit
www.ugenergy.com. Underground’s regulatory filings are available under
the Company’s profile at www.sedar.com.
Statements in this press release contain forward-looking
information and forward-looking statements within the meaning of
applicable securities laws (collectively, "forward-looking
information").
Forward-looking information is frequently characterized by words
such as "plan", "expect", "project", "intend", "believe",
"anticipate", "estimate" and other similar words, or statements
that certain events or conditions "may" or "will"
occur. In particular,
forward-looking information in this press release includes, without
limitation, statements with respect to the execution of agreements
arising from the Letter Agreement and the transactions and
operations contemplated by the proposed joint venture agreement
between Underground and SRL.
Although we believe that the expectations and assumptions reflected
in the forward-looking information are reasonable, there can be no
assurance that such expectations or assumptions will prove to be
correct. In particular, assumptions have been made that: (i)
Underground and SRL will obtain all required regulatory approvals
for the farm-in; and (ii) that the parties will utilize the
existing well permits in the farm-in; (iii) SRL will have the
necessary capital to complete its obligations under the proposed
joint venture agreement.
Forward-looking information is based on the opinions and estimates
of management at the date the statements are made, and is subject
to a variety of risks and uncertainties and other factors (many of
which are beyond the control of Underground) that could cause
actual events or results to differ materially from those
anticipated in the forward-looking information. Some of the risks and other
factors could cause results to differ materially from those
expressed in the forward-looking information include, but are not
limited to: operational risks in exploration, development and
production; delays or changes in plans; competition for and/or
inability to retain drilling rigs and other services; competition
for, among other things, capital, acquisitions of reserves, skilled
personnel and supplies; risks associated to the uncertainty of
reserve and resource estimates; governmental regulation of the oil
and gas industry, including environmental regulation; geological,
technical, drilling and processing problems and other difficulties
in producing reserves; the uncertainty of estimates and projections
of production, costs and expenses; unanticipated operating events
or performance which can reduce production or cause production to
be shut in or delayed; incorrect assessments of the value of
acquisitions; the need to obtain required approvals from regulatory
authorities; stock market volatility; volatility in market prices
for oil and natural gas; liabilities inherent in oil and natural
gas operations; access to capital; and other factors. Readers are cautioned that this
list of risk factors should not be construed as
exhaustive.
The joint venture agreement is subject to the entry by Underground
and SRL into a definitive agreement prior to November 30,
2012. While the
parties expect that a definitive agreement will be successfully
concluded upon the terms set forth in the Letter Agreement, there
can be no assurance that a definitive agreement will be concluded
on such terms or at all.
The forward-looking information contained in this news release is
expressly qualified by this cautionary statement. Underground does not undertake
any obligation to update or revise any forward-looking statements
to conform such information to actual results or to changes in our
expectations except as otherwise required by applicable securities
legislation. Readers
are cautioned not to place undue reliance on forward-looking
information.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
For further information please contact:
Peter Ballachey
Simon Clarke
Chief Financial Officer
Vice President, Corporate Development
Underground Energy Corporation
Underground Energy Corporation
Tel: 805-845-4700 x 17
Tel: 604-551-9665
Underground Energy (GM) (USOTC:UGGYF)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Underground Energy (GM) (USOTC:UGGYF)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
