Replies to post #94 on Eagle Ford Oil and Gas Corp. (ECCE)

[SeaOhToo]

This just about tells it all.....

On June 4, 2012, ECCE entered into an agreement though a special purpose entity named EFOGC – East Pearsall, L.L.C., a Texas limited liability company. ECCE owns 100% of the Class B Membership Interests in EFEP, while Medallion Oil Corp. (MOC) owns 100% of the Class A Membership Interest. EFEP completed the acquisition of 85% Working Interest in 3,683 acres in Frio County, Texas from Amac Energy, L.L.C. to drill and develop the Austin Chalk, Buda, Eagle Ford and Pearsall Shale The agreement with AMAC Energy was to purchase the 85% of the working interest on the East Pearsall lease. As part of the sales agreement, ECCE had to drill the one well on each of the three leases prior to 6 months of the expiration of the leases. Due to the fact that ECCE was unable to acquire drilling funds per the agreement prior to the agreed date, ECCE was required, as stated in the agreement, to reassign the leases back to AMAC Energy. As a result as stated in the settlement agreement, On July 8, 2014 the MOC-East Pearsall Board of Directors approved the release of all liens to AMAC and ECCE has been released from any obligation to AMAC Energy. As of September 30, 2014, an impairment charge of $6,464,436 was taken against this property.

MOC invested $7,000,000 into EFOGC – East Pearsall, LLC for the sole purpose of acquiring the AMAC leases, with MOC owning 100% of A series common stock and ECCE owning B series common stock as “designated operator”. Per the agreement with MOC, ECCE was required to acquire a minimum of $10,500,000 drilling capital by December 2012, however, ECCE was unsuccessful. MOC granted an extension for another six months, however ECCE was also unsuccessful in that attempt to raise funds as it was in all future periods. A part of the original agreement required that the East Pearsall, LLC return the original capital investment of $7,000,000 out of those funds, along with interest of 10% on that balance. As of September 30, 2014, the loan from MOC $7 million was outstanding against this property.

With the leases being reassigned to AMAC Energy and the subsequent agreement with MOC to close East Pearsall, LLC, the entity of EFOGC – East Pearsall is currently “winding down” and will be closed as an operating entity in the state of Texas. With this winding down, ECCE will no longer have any liability relative to EFOGC – East Pearsall and the East Pearsall leases. We anticipate completing this closure within a month of this report.