NEW YORK, NY–(Marketwired – Oct 5, 2016) – Viking Investments Group, Inc. (“Viking“) (OTCQB: VKIN) is pleased to announce it has acquired additional working interests in various oil and gas-related leases in Eastern Kansas.
Acquisition of Additional Production and Development Acreage:
On October 4, 2016, Viking, through a wholly-owned subsidiary, Mid-Con Petroleum, LLC (“Mid-Con“), a Kansas limited liability company, completed an acquisition whereby the company: (i) increased its working interest in three existing oil and gas leases in Miami and Franklin Counties in Eastern Kansas; and (ii) acquired a working interest in four new oil and gas leases in the same region, comprising approximately 660 acres of property.
Viking’s working interest in the new leases, known as the ABC, Terbrock, Renner and Griffin, range from 95% to 100%, and its working interest in three existing leases, known as the A. Wilson (East), L. Wilson (West) and Elam/Hahn, increased to 100%, 75% and 58%, respectively. Viking’s share of existing production from the acquired interests is approximately 40 barrels of oil per day. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Viking, through Mid-Con. The leases produce oil from the Cherokee formation at a depth of approximately 600 feet, and offer the potential for several future drilling locations. The acquisition price for this transaction was $1,105,857.72. Viking also issued the vendors and former working interest owners 5,152,021 common shares in the capital of Viking.
To facilitate the acquisition, Mid-Con obtained a revolving line of credit facility (“LOC”) in the principal amount of $3mm from a commercial bank with expertise in serving the needs of participants in the oil, gas and energy industry, particularly in the mid-continent region. The initial advance under the LOC was $1.8mm, which bears interest at a rate equal to Wall Street Journal Prime plus 1.5% with a two-year term. The commercial bank has a first-ranking security against all of the assets of Mid-Con.
Proceeds from the LOC were also used to repay a portion of the $1.625mm bridge loan secured by Viking in February/March of this year when the company acquired its first assets in Eastern Kansas and Western Missouri. Other monies used to complete the subject acquisition and to pay the balance of the portion of the $1.625mm loan that was due and outstanding as at October 4, 2016, being $1.5mm plus interest, were obtained in part through a private placement and advances by Viking’s President & CEO. The primary terms of the private placement, arranged through a licensed broker/dealer, are as follows: (i) Available Units – 35 Units @ $100,000 per Unit, with each Unit consisting of: (a) a Secured Promissory Note with a Face Value of $100k, Issuance Price of $62.5k and OID of $37.5k; and (b) 250,000 common shares in the capital stock of Viking at a price of $0.15 per share; (ii) Term – 6 months; (iii) Rate – 10%; (iv) Security – 1st ranking charge against the shares of Mid-Con. The company closed on 6.1 Units in connection with the acquisition/refinancing transaction(s).
Viking is an independent exploration and production company focused on the acquisition and development of oil and natural gas properties in North America. The company owns oil and gas leases in Alberta, Kansas and Missouri. The company’s interests in Kansas and Missouri, all now held through Mid-Con, cover over 6,000 acres of property. Viking targets under-valued investments with realistic appreciation potential and a defined exit strategy.
Viking is not an investment company, as defined by the Investment Company Act of 1940.