GeoPetro Resources Company's Subsidiary Announces an Increase in Purchase Price on Sale of Idle Equipment
SAN FRANCISCO, June 6, 2011 /PRNewswire/ -- GeoPetro Resources Company (NYSE Amex: GPR) ("GeoPetro", "we", "our" or the "Company") is pleased to announce that on May 31, 2011, its wholly-owned, indirect subsidiary, Madisonville Midstream LLC ("MML"), entered into an Amendment to the April 1, 2011, Equipment Purchase and Sale Agreement ("Amended PSA") with Peregrine Midstream Partners LLC ("Peregrine") for the sale of certain idle and non-income producing gas treatment plant equipment from our Madisonville Project located in Madison County, Texas. Under the Amended PSA, the Purchase Price of the equipment has been increased from $8,750,000 to $9,300,000, and the closing of the transaction is no longer subject to regulatory approval. A deposit of $150,000 of the Purchase Price was paid by Peregrine on April 1, 2011, an additional deposit of $150,000 was paid by Peregrine on May 31, 2011, and additional deposits will be paid by Peregrine monthly until closing, which shall take place on or before September 29, 2011. The deposits are non-refundable (except for a material breach of the Amended PSA by Madisonville), though they will be credited against the Purchase Price upon closing.
Under the Amended PSA, in the event that closing occurs on or before July 31, 2011, the Purchase Price shall be reduced from $9,300,000 to $9,100,000 and further, in the event the closing occurs on or before August 30, 2011, the Purchase Price shall be reduced to $9,200,000. The closing cannot be any later than September 29, 2011.
The sale of idle equipment at the Plant does not impact current treatment capacity to treat production of natural gas from the Rodessa Formation in the Madisonville Field.
Addressing the sale of idle equipment at the Plant, GeoPetro's President & CEO, Stuart J. Doshi commented "We are pleased with the higher purchase price and with the removal of contingency with respect to regulatory approval. The equipment being sold represents assets that are idle and non-income producing. We will have further comments upon closing of the transaction".
About GeoPetro
GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California. GeoPetro currently has projects in the United States, Canada and Indonesia. GeoPetro has developed a producing oil and gas property in its Madisonville Field Project in Texas. Elsewhere, GeoPetro has assembled a geographically-diversified portfolio of exploratory and appraisal prospects.
Cautionary Statements
This news release contains forward-looking information. Statements contained in this news release relating to future results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may involve known and unknown risks involving market prices for natural gas and oil, economic and competitive conditions, regulatory changes, resource estimates, estimates of proved and probable reserves, production forecasts, geological and engineering uncertainties, potential failure to achieve production from development drilling projects, capital expenditures and other risks and uncertainties, which may cause the actual results to be materially different from those expressed or implied by such statements. Additional risk factors include, among others, those described in the Company's Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. We do not have any intention or obligation to update forward-looking statements included in this press release after the date of this press release, except as required by law.
No stock exchange or regulatory authority has approved or disapproved of the information contained herein.
SOURCE GeoPetro Resources Company
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