NiMin Energy Corp.

NiMin Energy Corp.

December 18, 2009 09:15 ET

NiMin Energy Corp. Announces Closing of the Acquisition of Wyoming Oil Producing Properties

CARPINTERIA, CALIFORNIA--(Marketwire – Dec. 18, 2009) - NiMin Energy Corp. ("NiMin") (TSX:NNN) is pleased to announce that its wholly-owned subsidiary, Legacy Energy, Inc. ("Legacy"), has acquired four producing oil fields in the state of Wyoming. The purchase price was US$27.3 million, subject to post-closing adjustments, of which US$22 million was funded by a loan syndicated by Ionic Capital Corp. (the "Loan"), and the remainder from working capital from NiMin. Ionic Capital Corp. is partially owned by a director of NiMin. The effective date for the acquisition is December 1, 2009.

The four producing fields, located in Park County, Wyoming have approximate daily gross production of 370 barrels of oil per day. The oil is between 14 and 18 degrees API gravity. Legacy will operate all of the acquired fields.

NiMin had a reserve report prepared by Huddleston & Co., Inc., petroleum and geological engineers ("Huddleston"), in accordance with National Instrument 51-101 in respect of the acquired fields. At December 1, 2009, the acquired fields had 8.92 million barrels of proved reserves and 5.65 million barrels of probable reserves for a total of 14.57 million barrels of proved and probable reserves, net to Legacy's working interest. Of the proved reserves, 1.76 million barrels are proved producing and 7.16 million barrels are proved undeveloped. The estimated net present value of the proved reserves discounted at ten percent before tax is approximately US$160 million and the estimated net present value of the probable reserves discounted at ten percent before tax is approximately US$85 million. The reserves are one hundred percent oil.

Legacy intends to commence a development drilling program on the acquired fields in the first quarter of 2010. The last well drilled on any of the fields was in 1995 and prior to that the previous well was drilled in 1985.

The Loan is for one year and is in the amount of US$22 million which is secured by all the assets of NiMin and Legacy. The Loan provides for interest of one percent per month (12% per annum) and the issuance of 2,566,667 common shares of NiMin. Interest is payable monthly and the loan principal is due December 17, 2010. The Loan may be repaid at anytime without pre-payment penalty.

Summary Information Relating to NiMin and Legacy

NiMin and its subsidiary, Legacy, are headquartered in Carpinteria, California. NiMin is an independent oil and natural gas company with drilling and production operations in the United States.

Cautionary Statements

This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws, including the drilling program to be commenced by NiMin on the acquired fields. Although NiMin believes that the expectations reflected in its forward-looking statements are reasonable, such statements have been based upon currently available information to NiMin. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in forward-looking statements. Risks include, but are not limited to: the risks associated with the oil and gas industry (eg., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price, price and exchange rate fluctuation and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in more detail in our Annual Information Form and other documents available at Readers are cautioned to not place undue reliance on forward-looking statements. The statements in this press release are made as of the date of this release and, except as required by applicable law, NiMin does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement. NiMin undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the NiMin, Legacy or their respective financial or operating results or (as applicable), their securities.

Contact Information

  • NiMin Energy Corp.
    Jonathan S. Wimbish, CFA
    Chief Financial Officer
    (805) 566-2900
    (805) 566-2917 (FAX)