UnionTown Energy Inc. Completes Acquisition of Musselshell Oil and Gas Property
Workover Crew Is Engaged to Commence Immediate Work on Property Believed to Contain an Estimated Potential 10.4 Million Barrels of Recoverable Oil According to a Recent Third Party Report
BILLINGS, MT--(Marketwire - April 6, 2011) - UnionTown Energy Inc. (OTCBB: UTOG) is pleased to announce that it has completed its acquisition and corresponding Super 8K filing with the SEC of the Musselshell Property (the "Property"), an approximately 7,000-acre central Montana site that straddles the Heath and Amsden shale formations.
As previously announced on March 17, 2011, UnionTown entered into a definitive agreement to acquire the Property, which is believed to have estimated potential oil reserves of 10.4 million barrels. These estimated reserves have been determined by an independent, third party geologist in the report titled: "Potential Reserves of the Heath and Amsden Formations in the Musselshell Prospect, Central Montana."
The Company believes the western half of the property, which covers the Heath formation, has the potential to support 16 horizontal drill sites with 2,000 foot horizontal legs. Seismic data on the eastern half of the property, which covers the Amsden formation, also shows exploration potential.
The Company also reports that, immediately following the closing of this acquisition, it will begin operations to perforate the existing well to test for production.
Under the terms of the original acquisition agreement, UnionTown was to issue 10,000,000 restricted common shares and 1,000,000 preferred shares which held only voting rights. This agreement was amended on April 5th to replace the preferred shares option with the grant of a 5 year option to the vendor, to acquire an additional 10,000,000 restricted common shares at $3.00 per share. The Company believes that this successful negotiation and amendment are seen as a strong benefit to UnionTown and its shareholders.
In return, UnionTown will receive 75% of revenues generated from the Musselshell Property, with the operator receiving a 20% carried working interest.
"We are very pleased to have completed our acquisition of Musselshell on time and expect that this will be the first of several key acquisitions to come," said Darren Stevenson, President and CEO of UnionTown Energy. "We have prepared and reviewed the work-over plan and our crews are ready to move the service rig immediately onto the property with the goal of making UnionTown an oil producer; we are now focused on closing additional acquisition targets."
About UnionTown Energy Inc.
UnionTown Energy Inc. (UTOG) is focused on the acquisition, exploration, development and production of oil and natural gas properties. Our strategy is to build a portfolio of energy producing assets in known and producing oil and gas fields throughout North America. With the completion of our acquisition of the Musselshell Property, we're moving rapidly to bring the first well to production. We're also in advanced stages of acquisition of two other oil and gas properties, and we have a pipeline of additional potential acquisitions under consideration. For more information about our company, please visit www.uniontownenergy.com.
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