SOURCE: EFL Overseas Inc.
HOUSTON, TX--(Marketwire - Oct 24, 2012) - EFL Overseas Inc. (OTCBB: EFLO) ("EFLO") is pleased to announce its acquisition of additional rights and interests in the Liard basin gas field and facilities located in the Kotaneelee Area, Yukon Territory, Canada (the "Assets"). Effective October 17, 2012, EFLO acquired a 30.664% interest in the Assets from Nahanni Energy Inc., and certain of its wholly owned subsidiaries ("Nahanni"). The Nahanni purchase follows EFLO's earlier acquisition of Devon Canada's interest (generally a working interest of 22.989%, with a working interest of 69.337% in one gas well) in the Assets. Upon closing the Nahanni purchase, EFLO became the largest interest holder in the Kotaneelee with a general interest of 53.67% and a working interest of 100% in one gas well.
"Our acquisition of the additional interest at Kotaneelee provides us with a controlling position in this exciting project," stated EFLO Chairman Henry Aldorf. "Increasing our working interest to 54% allows us to drive forward development plans, and offers our shareholders a greater potential upside."
"With the closing of the Nahanni acquisition, we are focused on actively pursuing additional interests at Kotaneelee and the surrounding area," added EFLO Chief Executive Keith Macdonald. "The larger asset base will be helpful as we evaluate our future market opportunities in the Pacific Rim, North America and the Yukon."
The Assets include 30,188 acres of land, a gas dehydration plant (capacity: 70 million cubic feet per day), one water disposal well (capacity: 6,000 barrels per day), one well temporarily shut-in for plant maintenance and two suspended gas wells, flarestack, storage tanks, airstrip, roads, gathering systems, geological data, equipment, and other transportation and camp infrastructure.
As consideration for the Assets, EFLO paid Nahanni CAD$400,000 (USD$398,550) in cash, and 1,614,767 shares of one of its subsidiaries, which are exchangeable on a one-for-one basis for shares of EFLO's restricted common stock (valued at CAD$4,100,000; USD$4,190,610). In addition, ELO indemnified Nahanni against its portion of the abandonment, reclamation and environmental liabilities associated with the Assets. EFLO intends to undertake an active development and exploration program, which is expected to defer these potential liabilities into the future.
EFLO continues to pursue the acquisition of additional working interests in the Assets.
Forward Looking Statements
This press release includes forward looking statements as determined by the US Securities and Exchange Commission (the "SEC"). All statements other than statements of historical fact, included in this press release that address activities, events, or developments that EFLO believes or anticipates will or may occur in the future are forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of EFLO to be materially different from any future results expressed or implied by such forward-looking statements. Such factors include general economic conditions, the ability to acquire and develop specific projects, the ability to fund operations and changes in consumer and business consumption habits and other factors over which EFLO has little or no control. EFLO does not intend (and is not obligated) to update publicly any forward looking statements. The contents of the press release should be considered in conjunction with the warnings and cautionary statements contained in the EFLO's recent filings with the SEC. There can be no assurance that EFLO will be successful in completing additional Kotaneelee acquisitions.
ON BEHALF OF THE BOARD OF DIRECTORS