EFIR merger news out today
EGPI Firecreek Signs Letter of Intent to Acquire Oil Compressor Technology Company
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11:44 AM ET 1/21/10 | GlobeNewswire
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11:54 AM ET 1/21/10
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EGPI Firecreek, Inc. (OTCBB:EFIR) announced today that it has signed a Letter of Intent to acquire a proprietary cutting edge oil and gas compressor technology company (referred as "The Company").
The Company has developed an oil and gas compressor that is both unique and proprietary. Among the other cost saving advantages, the compressor attaches to the walking arm of the oil well pumping unit without requiring an outside source of power. The unit is designed to be relatively maintenance free. Competitors' compressors have historically required significant down time to perform maintenance on the compressor, specifically the seals within the compressor. It is not uncommon to have down time on competitors' equipment amounting to several days a month compared to only a few days per year with The Company's state-of-the-art compressor.
Additionally, competitor's compressors are also fuel driven which means that a source of power has to be available in order for the compressor to function. The Company's compressor uses the power of the oil pump itself to drive the compressor which eliminates all fuel cost. The end result is an increase in oil and gas flow of as much as 10:1, utilizing a compressor that is operational 24 hours a day and seven days a week.
The technology has been tested by the United States Governments Rock Mtn. testing center facility at the Tea Pot Dome oil field and has consistently produced increased production results.
In addition to the compressor, The Company is a 50% joint venture (JV) partner with a natural gas collection pipeline located near San Antonio, TX, independently valued at over $54 million. The Company's investment in this pipeline is approximately $3 million while its current share is valued at $27 million. Recently, the JV partner has notified its intention to develop the other pipelines they have identified as part of the properties to be included in the joint venture. There are currently four similar pipelines identified and the JV partner has identified several similar opportunities. The Joint Venture Agreement contains provisions that prevent The Company's 50% participation from being diluted. The technology is expected to increase the value of the recently announced acquisition, the Sierra Pipeline.
Dennis Alexander, Chairman and CEO, stated, "This recent LOI has been almost a year in the making. We feel very fortunate to have the ability to successfully implement and continue with the growth strategy we have in mind for our oil and gas division. This proposed acquisition will vertically integrate with our operations while helping us diversify in the oil and gas industry. " He also stated, "Although our current trading activity and stock price is nowhere near indicative of the positive and optimistic things that are currently going on with our company, we feel it is only a matter of time before the market realizes the value we believe has been created over the last several months. We thank all of our loyal shareholders who have stood by us as we have revamped our corporate and operational infrastructure."
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