It looks like to me the company wants to get up with there filings and finally start moving forward again. Hopefully the Great Northern Energy Inc. deal is now behind them.
On August 6, 2014, the Company executed a Purchase and Sale Agreement (the "PSA") with Black Gold Kansas Production, LLC, a Texas limited liability company (“BGKP”). Pursuant to the PSA, the Company shall receive an agreed upon percentage of the working and net revenue interest in and to the West Mule Creek oilfield, which is located in Wyoming. Through this interest, the Company will receive a certain percentage of the West Mule Creek lease, acres of land within Niobrara County that contains 13 wells, certain rights to specific wells and land contained on the lease, as well as any by-products produced thereon, machinery, equipment and the books and records related to same. Pursuant to the PSA, the parties also entered into a Joint Exploration Agreement (the "JEA"), with a 3 year term. On August 6, 2014, the parties also entered into an addendum to the PSA that clarifies that the PSA shall not be interdependent with or upon the JEA and no default under the JEA shall effect the PSA or the validity of the related purchase and sale.
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The total consideration for the purchase, sale and conveyance of the Assets to the Company and the Company’s assumption of the undivided share of liabilities provided for in the PSA, is the Company’s payment to BGKP of the sum of $2,352,000 (the “Purchase Price”), as adjusted in accordance with the provisions of the PSA. Although required by the terms of the PSA, the Company has not yet placed $15,000 in an escrow account (the "Earnest Money"), which upon closing, would be credited towards the Purchase Price; if however, the closing does not occur because the Company fails or refuses to do so when BGKP is otherwise ready to close and has satisfied all of its obligations under the PSA, or the Company does not cure a material breach, then BGKP shall keep the Earnest Money as liquidated damages in lieu of all other damages. As of the date of this Report, the Company has not yet paid the Purchase Price and will not be able to pay that, or the Earnest Money payment, without receiving additional funding, of which there can be no guarantee. Accordingly, the purchase may not occur.
The Company is entitled to conduct due diligence of the properties prior to closing and the PSA includes curative provisions if certain defects or other issues arise during such due diligence and how any disputes regarding same may be handled.
The closing of the transaction is currently expected to occur in October 2014, subject to the satisfaction or waiver of certain customary closing conditions, including receipt of all approvals necessary to carry out the activities contemplated under the PSA and BGKP's delivery of all recordable releases and terminations covering all liens on the property arising under the related credit agreement.
The PSA may be terminated (1) at any time prior to closing by mutual written consent of the Company and BGKP, (2) by either party if closing has not occurred by August 2014, or such later date to which the Closing Date has been delayed, or if any government authority issued an order or ruling permanently restraining, enjoining or otherwise prohibiting the closing, (3) by the Company if there is a material breach of the representations and warranties made by BGKP with 15 days prior notice, and (4) by BGKP if there is a material breach of the representations and warranties made by the Company with 15 days prior notice. Either party may also terminate the PSA is the other party does not cure any failure to comply in any material respect with any of such other party's covenants or agreements.
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