SOURCE: Xun Energy, Inc

Xun Energy, Inc

February 21, 2012 08:00 ET

Xun Energy's Xun Oil Accepts Commercial Loan Offer of $33 Million

PORTLAND, OR--(Marketwire - Feb 21, 2012) - Xun Energy, Inc. ("XNRG") (OTCBB: XNRG) announces that its wholly owned subsidiary, Xun Oil Corporation (Xun Oil), accepted a Commercial Loan Offer which provides in part for Xun Oil to receive from PRIVATE COLLATERAL LENDERS CORP. (PCLC) US$33,000,000 in financing for the acquisition of the West Crockett Oil and Gas Leases (West Crockett) and the future development of West Crockett.

The financing will be used to acquire West Crockett in Crockett County, Texas, which is under contract through Crockett Energy Corporation, a company that Xun Energy, Inc. announced the acquisition of with its SEC 8-K filing on February 15, 2012.

West Crockett consists of 2,320 acres which has 17 active oil wells producing 1,900 to 2,500 barrels of premium crude oil per month from the San Andres and Queens formations in the Clara Couch Fields of the Permian Basin. The leases also include 2 injection wells, 24 Proven and Undeveloped (PUD) wells and 66 probable locations. A recent independent 3rd party geological and reservoir study indicates that West Crockett has a proven reserve of 1.6351 million barrels and probable reserves of 1.6264 million barrels of crude oil. West Crockett has been producing crude oil since 1941 with an average historical decline curve of 2%.

Closing of the financing transaction is subject to the satisfaction of conditions precedent including but not limited to: Property and public liability insurance including all risk insurance (with extended coverage endorsement) on the Borrower's real and personal property as required including lands, buildings, equipment and inventory in amounts and from an insurer acceptable to PCLC showing PCLC as low payee or mortgagee by way of standard mortgage endorsement, a refundable by guarantee Commercial Loan Underwriting Fee to PCLC of $360,000 CDN, confirmation that all Federal Revenue Agency accounts of the corporation are current, evidence that all business taxes are paid to date, and documentation to include, but not limited to the following:

  • Professional Evaluation showing full debt-service capacity of wells. (Security).
  • Résumé of Evaluator of Crockett (Texas) oilfields Property.
  • Stock Ownership Documentation.
  • Assignment Letter from the Owner of said properties.
  • Development Plan. (Business Plan).
  • Résumés of Principals.
  • Final Approval by PCLC's lawyer and underwriter of all Documents presented to PCLC by Borrower.

Closing date is anticipated to be on or before April 30, 2012. For a more detailed description of the Commercial Loan Offer with PCLC, readers should review the 8-K filed today with the SEC. There are no assurances that the proposed transaction will in fact close.

"We are extremely excited for the potential of acquiring West Texas crude oil producing properties with financing, not only for the acquisition of the properties, but, also with funding for the development of 26 new offset wells," stated Jerry G. Mikolajczyk, XNRG President and CEO. "Upon closing, we are in a cash flow positive position with the potential to increase the monthly cash flow with each new successful well."

About XNRG

Xun Energy, Inc. is a development stage company with limited assets. The Company's prospects will be subject to closing on the financing and the success of the drilling program.

This Press Release contains forward-looking information within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Such forward-looking statements by definition involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that reserves, production, pricing levels or other factors pertaining to the oil and gas operations will be sustained at the expected rates or levels over time. Discussions of factors, which may affect future results, are contained in our recent filings. Under no circumstances does this Press Release constitute an offer to sell or a solicitation of an offer to buy the securities of the company described in this Press Release in which such offer, solicitation or sale of securities would be unlawful prior to registration, qualification or filing under the securities laws of any jurisdiction.

Contact Information

  • Contact:
    Peter Matousek
    Vice President-Investor Relations
    telephone: 1-775-200-0505
    email: Email Contact