Acquisition of West Texas Well bores and Grant of Exclusive License to HIP Proprietary Down Hole Oil and Gas Enhancement Technology.
OTC SYMBOL: HIPCF - (OTC:BB)
VANCOUVER, March 31 /PRNewswire-FirstCall/ - HIP Energy Corporation (OTC: BB - "HIPCF") (the "Company") is pleased to announce that its wholly owned subsidiary HIP Energy (Texas) Inc. has entered into an Asset Purchase Agreement with each of HIP Energy Resource Limited ("HIPER") and its wholly owned subsidiary Equi Energy LLC., pursuant to which the Company acquired ownership of 50 existing oil and gas well bores held by HIPER located in West Texas, and 1 well and well bore located in Central Texas. In addition, the Company will within 12 months be transferred for no additional consideration legal title to an additional 41 wells and well bores in East Texas and 60 wells and well bores in Louisiana, USA. As consideration for the sale and transfer of the initial 50 well bores in West Texas and the 41 East Texas and 60 Louisiana well bores, held by HIPER. HIPER received 20 million common shares of the Company as consideration for the sale of the well bores. In consideration of the transfer of the Opal 1 Well in Central Texas, the Company agreed to pay HIPER its accrued development, equipment and lease operating costs incurred on the Opal 1 Well. These cost will be paid on a declining basis from any oil and gas production revenues received by the Company generated on the Opal Wells(s) in excess of 20 bbl oil or gas equivalent per day, using the HIP Technology. The Asset Purchase Agreement closed effective March 30, 2010.
In addition the Company is pleased to announce that on March 30, 2010 the Company, through its wholly owned subsidiary HIP Energy (Nevada) Corporation, completed the acquisition of a "worldwide exclusive right" to the proprietary "HIP Down Hole Oil and Gas Enhancement Technology" pursuant to the terms of a License Agreement with HIP Technology Limited ("HIPTL") and its subsidiary Group Rich Development Limited. This patented oil and gas recovery technology process was developed by Mr. Peter Noonan of Texas, USA over some 20 + years. Simply stated the HIP Technology is a proprietary down hole oil and gas technology designed and developed to increase oil and gas production from non-commercial, uneconomic, depleted or damaged well bores and oil and gas reservoirs. Under the License Agreement, the Company has obtained the exclusive right to use the HIP Technology for any and all commercial applications, including the use and application of the technology on the initial 51 well bores, the additional 101 well bores acquired by the Company under the Asset Purchase Agreement and any and all other commercial applications of the HIP Technology, including any and all after acquired oil and gas well bores, be they acquired by HIPER or the Company by way of purchase, joint venture, license or otherwise.
Under its "exclusive worldwide commercial license", the Company also has the right, subject to the consent of HIPTL, to sublicense the use of the HIP Technology in a particular geographic area or application. Any such sublicense of the HIP Technology is independent of the Company's ability to acquire, joint venture, or otherwise participate in acquiring ownership of or an interest in the well bores on which the HIP Technology will be applied, be it by the Company or under and through a sublicense. In consideration of the grant of the License Agreement, the Company has issued 30 million common shares of the Company to HIPTL; and agreed to pay to HIPTL an annual royalty fee equal to 25% of net revenues derived from income associated with the use and application of the HIP Technology.
Although HIPTL is expected to have the right to conduct ongoing research & development and modifications of the HIP Technology for the purpose of doing technology or product enhancements, field maximization and for the purpose of training personnel, HIPTL does not retain any right to use the HIP Technology for commercialization which solely vests with the Company.
Appointment of Additional Board of Directors and Officers:
In conjunction with the closing of the Asset Purchase and License Agreement, the Company is pleased to announce the appointment of the following persons to the Company's Board of Directors and to the Offices set opposite their respective names:
Peter Noonan: Chairman / Director: Mr. Noonan (68) Houston, Texas. Mr Noonan is the inventor of and holds the US Methods Patent to the Hydrogen Inducement (HIP(TM)) Process, originally referred to as the NooPar(TM) Process. Mr. Noonan has had a lifelong career in various aspects of the oilfield service sector, and was an Officer in the US Navy and is a Life Member of the US Naval Academy Alumni and the Disabled American Veterans Alumni.
Mr. James Chui: Executive Vice-President Marketing / Director: Mr. Chui (46) is a graduate of the Shanghai University of Science and Technology (1985). In addition he attended courses (2004 - 2006) towards an EMBA from Beijing University Mr Chui served as the President and CEO of various successful internationally based companies in the high tech manufacturing and software design and application sectors. Mr. Chui currently serves as the Co-Founder and CEO of "HIP Energy Resource Limited" and "HIP Technology Limited". He is also currently the President and CEO of HRJC Enterprises Inc, and is an existing director of the Company.
Mr. Carlos A. Contreras: Executive Vice-President Operations / Director: Mr. Contreras (62) has a long and distinguished career in the oil and gas industry dating back some 35+ years, including having served as the Minister of Energy and Hydrocarbons - La Paz (Bolivia) from 1999 - 2001. Mr. Contreras began his career in the oil industry principally with Occidental Petroleum back in early to mid 1970's until 1999. During that time he served many executive roles including Corporate Officer for Occidental Oil and Gas Corporation, Bakersfield, California (1987 - 1999), Occidental Philippines Inc. & Occidental Asia - President and General Manager (1997 - 1999); Vice President and General Manager (1990 - 1997); Occidental International Exploration and Production Company - Vice President International Coordination (1987 - 1990). Most recently, Mr. Contreras has acted as the Director and COO of World GTL Trinidad Limited, West Indies (Feb 2007 - August 2008; and as the Chief Operating Officer for HIP Energy Resource Limited (June 2009 - present).
Mr. Contreras holds a Bachelor of Science Degree in Chemical Engineering (University of Tulsa, Tulsa Oklahoma); an associate degree in Engineering (Honors) from Middle George College, Cochran, Georgia; and has done Graduate works in "Macromolecular Science" - Case Western Reserve University , Cleveland Ohio. He has completed the Executive Program in Management - University of California at Los Angeles, California. In addition, he has successfully completed numerous formal courses including Performance Management, Executive Decision-Making, and Professional Presentations and certified for Offshore Survival.
In commenting about the proposed well bore acquisition and HIP Technology Licence Agreement, the Company's President provided the following commentary:
"We are excited by the opportunities afforded us having acquired the numerous wells and well bores and the HIP Technology License. The Company will truly be unique in its business model in that it will be able to mitigate and better manage the financial and exploration risk associate with traditional oil and gas exploration and production companies as exploration can be extremely expensive and time consuming.
By acquiring the "exclusive worldwide license" to the proprietary HIP Technology, the Company is seeking to position itself as a leading low risk oil and gas producer. Management's initial focus will be to concentrate its operations on applying the HIP Technology to know existing and proven well bores and reservoirs that have become non commercial, uneconomic, depleted or damaged. By proving out the viability and success of the HIP Technology in dramatically increasing production from a defined segment of well bores and reservoirs, we believe the Company will be in an enviable position of building a diverse portfolio of oil and gas reserves, profitable production, and forward looking investment opportunities for the company, its shareholders and investors."
In connection with closing of the asset purchase agreement and the license agreement, the Company agreed to pay a finders fee of 80,000 common shares to a finder for services provided to the Company.
HIP Energy Corporation.
Per: Mr. Richard Coglon (B.Com/LL.B)
President / Director
For further information on this release contact [email protected]
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
FORWARD LOOKING STATEMENTS
Certain statements in this document are forward-looking statements or information (collectively "forward-looking statements"), within the meaning of the applicable securities legislation. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as: "will", "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intend," "plan," "projection," "could," "vision," "goals," "objective" and "outlook") are not historical facts and may be forward-looking and may involve estimates, assumptions and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. In particular, the forward-looking statements in this news release include: that the various oil and gas assets acquired by HIPE from HIPER and or the "worldwide exclusive right" to the proprietary "HIP Down Hole Oil and Gas Enhancement Technology" may have any commercial viability, that Management's initial focus will be to concentrate its operations on applying the HIP Technology to known existing and proven well bores and reservoirs that have become non commercial, uneconomic, depleted or damaged, and that by proving out the viability and success of the HIP Technology in increasing production from a defined segment of well bores and reservoirs, the Company will be in a position of building a diverse portfolio of oil and gas reserves, profitable production, and forward looking investment opportunities for the company, its shareholders and investors.
Although the Company believes that the expectations reflected by the forward-looking statements presented in this document are reasonable, the Company's forward-looking statements have been based on assumptions and factors concerning future events that may prove to be inaccurate. Those assumptions and factors are based on information currently available to the Company about itself and the businesses in which it operates. Information used in developing forward-looking statements has been acquired from various sources including third party consultants, suppliers, regulators and other sources.
Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom we have contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. The Company's Annual Report on Form 20-F and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com and the EDGAR website www.sec.gov) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. Except as required by applicable securities laws, the Company disclaims any intention or obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.
SOURCE HIP Energy Corp.
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