Dejour Energy secures $6.5 million in local backing for Kokopelli drilling expansion
Thursday, Jan 03, 2013
Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), an independent oil and natural gas exploration and production company operating in North America's Piceance Basin and Peace River Arch regions, today announced that it has agreed to a non-dilutive financing from a private Denver based drilling fund to complete the first Kokopelli well and drill and complete up to three additional wells in early 2013. Total capital provided for additional drilling at Kokopelli will be $6.5 MM.
Dejour will contribute its interest in Federal Well 6-7-16-21 which was drilled in November (new completion schedule forthcoming to efficiently integrate the existing well completion into the program expansion), and the fund will contribute the new capital to complete the program. In addition to Dejour’s retained interest in the multi well package, the Company will receive an infrastructure usage fee of 20 cents per MCF of gas production from the wells and a 25% reversionary interest after the fund has received 125% of payout on the initial capital contribution from gas and liquids sales. The agreement also includes an option for the fund to repeat this investment under terms even more advantageous to Dejour. Dejour maintains its 72% WI in the entire 2200 acres at Kokopelli, including all the deep rights, free of any debt.
“This funding package benefits Dejour by kick starting the development of the 220 potential wells at Kokopelli with no additional cash contribution required from the Company. This arrangement provides a more efficient startup of production in 2013, and most importantly, allows Dejour to substantially de-risk the development of its acreage in this liquids rich gas field despite the current low natural gas and NGL product price environment. By accelerating project development without the incurrence of any debt obligation Dejour can now demonstrate the potential project value and is well positioned to enjoy any future increase in commodity prices while having very limited exposure to short term price softness,” says Hal Blacker, Dejour COO.
Source: Business Wire
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