Surge Global Energy Acquires Pawnee County, Oklahoma Property
December 16, 2009 (FinancialWire) — On December 8, 2009, Surge Global Energy, Inc. (OTCBB: SRGG) acquired a 75% working interest (until payout) in four, and up to ten, existing oil and gas wells which had been drilled, and were producing previously, on a 40-acre lease in Pawnee County, Oklahoma for $300,000 under a purchase and equipment lease agreement with Mandalay Energy Resources, LLC.
The terms of the agreement provide for the funds to be paid directly to Cavu Resources, Inc. under a turnkey contract to be used for rework and new equipment on the four oil and gas wells. The rework and equipment costs will be repaid to Surge in monthly installments of 75% of net income received from oil and gas purchaser each month up to a total of $40,000 per month until a total of $354,000 is paid in full.
After payout, Surge will retain a 25% working interest in the property. Surge has the right to increase its investment in the property to 10 wells on the payment of an additional $364,000. Surge also has received an area of mutual interest on surrounding acreage and a security interest in the property until the lease is paid in full. The 40 acre property is projected to have reserves of 133,000 barrels of oil and gas equivalents from 10 wells and Surge’s 25% share is projected to equal 33,000 gross barrels of reserves.
Surge will use existing cash on hand and may also sell additional common shares to finance this acquisition.
Surge is engaged in the acquisition of crude oil and natural gas properties in the United States and Canada.
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