HOUSTON, Oct. 9, 2012 (GLOBE NEWSWIRE) -- Armada Oil, Inc. (OTCQB:AOIL), an emerging independent oil and gas company, today announced an important 1,000+ net acre addition to its existing 25,000 acres under control. Strategically situated near existing infrastructure in Carbon County, Wyoming, the 26,000 acre project footprint marks Armada Oil's ongoing efforts to secure contiguous land and expand in a region where the emergence of new oil completion technologies has spurred heightened activity and growing interest. Armada Oil has a 100% working interest in the additional acreage.
"While the full potential of the liquids-rich Niobrara is still being discovered, numerous majors -- including Anadarko Petroleum, EGO Resources, Marathon Oil, and Noble Energy -- are now working to increase their acreage positions. I'm pleased that we have been among the first to arrive, secure a meaningful position, and undertake a quality technical program," explained Armada Oil President and CEO, James J. Cerna.
Today's news of expanded acreage follows on the heels of Armada Oil's recently announced plans to accelerate oil exploration in the Niobrara with a 3 dimensional (3-D) seismic survey of approximately 41.05 square miles (26,272 acres) in and around Southern Wyoming's Laramie and Hanna Basins. Armada Oil entered into a geophysical data acquisition agreement with Geokinetics USA, Inc. to undertake the work.
"This expansion and technical work demonstrates our serious commitment to pursuing the potential of the Niobrara, an unconventional play like the Bakken, Eagleford and others, that has the potential to make America energy independent. The advent of horizontal drilling with new completion techniques is still in its infancy in terms of unlocking unconventional resources," explained Mr. Cerna.
In addition to Armada Oil's ongoing efforts to expand and exploit its Niobrara acreage, management has undertaken plans to leverage producing assets in Louisiana by way of a recently proposed business combination with Mesa Energy Holdings, Inc.
Armada Oil and Mesa Energy announced last week that the companies have entered into a non-binding letter of intent in order to pursue a business combination. The closing of the transaction is subject to further due diligence, negotiation and execution of definitive agreements, as well as necessary consents and approvals. The Board of Directors of both Armada Oil and Mesa Energy have unanimously approved the key terms of the proposed transaction and have authorized their respective management to pursue the transaction.
Management of the companies believes that this contemplated transaction has several benefits:
- It would bring together a sound, proven management team with both operational and public company experience;
- Strong conventional, producing assets would provide cash flow and an underlying value to combined shareholders;
- A low-cost entry into the Niobrara play with multiple underlying conventional prospects would leverage the combined company to significant upside;
- The combined company would also have an attractive foothold in the Mississippi Lime play in Oklahoma; and
- The combined company would have critical mass to help raise capital efficiently, facilitate liquidity and spur rapid growth, thereby creating a solid platform to recognize value for shareholders.
The terms of the letter of intent are non-binding and subject to change. C. K. Cooper & Company is serving as financial advisor on the transaction. It is the goal of both Armada Oil and Mesa Energy to close this anticipated transaction by the end of this year.
The completion of the described transactions is conditioned on, among other things, the parties being satisfied with the results of their respective due diligence, each party obtaining all required consents and approvals, including all legal and regulatory approvals and all applicable shareholder and board of directors approvals and any necessary approvals from third parties, agreement on all final terms and conditions and negotiation of definitive agreements, and there having occurred no material adverse change in the business or condition, financial or otherwise, of either party. Armada Oil and Mesa Energy can provide no assurances that these conditions will be satisfied. Management cautions investors against making investment decisions based on any expectation that the proposed transaction will be consummated, because, in its view, such expectations are speculative.
About Armada Oil, Inc.
Houston, Texas-based Armada Oil, Inc. (OTCQB:AOIL) is an independent oil and gas company focused on discovering, acquiring and developing multiple objective onshore oil and natural gas resources in prolific and productive geological formations in North America. Armada Oil holds strategic acreage positions in and around the Laramie and Hanna Basins in Southern Wyoming that includes a contiguous 26,000+ acre site near existing infrastructure in the liquids-rich Niobrara formation and a footprint in the Eagle Ford shale play in Texas.
More information about Armada Oil may be found at http://www.armadaoilinc.com.
The Armada Oil, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=13093
Forward-Looking Statements
This press release contains forward-looking statements, including with respect to the negotiation, implementation and effects of a proposed business combination between Mesa Energy and Armada Oil that may result from the non-binding term sheet. Those statements and statements made in this release that are not historical in nature, including those related to future synergies, competitive advantages and profitability, constitute forward-looking statements. Forward-looking statements can be identified by the use of words such as "expects," "projects," "plans," "will," "may," "anticipates," believes," "should," "intends," "estimates," and other words of similar meaning. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. These statements are subject to risks and uncertainties that cannot be predicted or quantified, and Mesa Energy's or Armada Oil's actual results may differ materially from those expressed or implied by such forward-looking statements. These statements are subject to the risks and uncertainties, including: difficulties, delays, unexpected costs or the inability to reach definitive documents with respect to, or consummate, the proposed business combination and other transactions referred to in this press release and those described in the documents we file with the U. S. Securities and Exchange Commission, and risks associated with the inherent uncertainty of Mesa Energy's and Armada Oil's future financial results, Mesa Energy's or Armada Oil's ability to locate and acquire suitable interests in oil and gas properties on terms acceptable to them and to integrate and successfully exploit any resulting acquisitions, the availability and pricing of additional capital to finance their respective operations and leasehold acquisitions, their respective ability to build and maintain successful operations infrastructures, the intensity of competition, changes and volatility in energy prices and general economic conditions. All forward-looking statements included in this release are made as of the date of this press release, and neither Mesa Energy nor Armada Oil assumes any obligation to update any such forward-looking statements.
Statement Regarding Additional Information That May Become Available
If a transaction is to be proposed to the stockholders of Mesa Energy, Mesa Energy and Armada Oil would file with the Securities and Exchange Commission and distribute a Registration Statement on Form S-4 covering securities to be issued in the transaction. It is expected that Mesa Energy shareholders would receive a prospectus and proxy statement or information statement, as applicable, in connection with such transaction. The final terms of the prospective transaction remain subject to change and would only be reflected in a binding definitive agreement that remains to be negotiated between the companies. A copy of the definitive merger agreement would be filed along with the prospectus and proxy statement /information statement. Mesa Energy stockholders would be urged to read these and any other related documents the corporation may issue. If and when these documents are filed, they will be available for free at the SEC's website, www.sec.gov. Additional information on how to obtain these documents from Mesa Energy would be made available to stockholders if and when a transaction is to occur. Such documents are not currently available.
No Offer or Solicitation to Sell
This communication shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. Mesa Energy, its directors and executive officers, may be deemed to be participants in the solicitation of proxies or consents from Mesa Energy's stockholders in connection with any transaction that might be proposed to such stockholders. Information about the directors and executive officers of Mesa Energy and their ownership of Mesa Energy and Armada Oil stock will be included in the prospectuses and proxy/consent solicitation statements if and when they become available.