SAN DIEGO, Nov. 28, 2017 (GLOBE NEWSWIRE) — Royale Energy, Inc. (OTCQB:ROYL) (the “Company” or “Royale”) today announced that it has signed a definitive purchase and sale agreement for a 50% non-operated working interest in oil and gas leases in the Sansinena and East Los Angeles fields operated by Matrix Oil Management Corporation (“Matrix”). The remaining 50% working interest in the leases being acquired are owned by Matrix. Upon completion of the pending merger between Matrix and Royale, the combined companies will own 100% working interest in these fields. The acquisition will add over 8.7 MBOE of net proved reserves to the merged company’s reserve base.
Following shareholder approval of the merger agreement between Royale and Matrix on November 16, 2017, Royale reached agreement with private Seller. Royale has agreed to pay $15 million in cash at closing for all of Seller’s interests in the two fields, subject to retention by Seller of a term overriding royalty interest in production of up to 300,000 barrels of oil from the leases. The overriding royalty interest will initially be 2.75% of production and increase after 2018 by 1.00% annually to a maximum of 9.75% until the 300,000 barrel limit is reached. The purchase agreement also contains customary representations and warranties by the parties and contemplates closing contemporaneously with the Royale/Matrix merger closing. Closing of the purchase is contingent on Royale’s arranging of acceptable financing.
“We are pleased to reach this agreement which will consolidate the working interests in these two fields and double our proven reserves. This is an important step toward our goal of creating superior value for our drilling investors and shareholders,” said Royale’s CEO Jonathan Gregory.
About Royale Energy, Inc.
Founded in 1986, Royale Energy, Inc. (OTCQB:ROYL) is an independent exploration and production company focused on the acquisition, development, drilling and marketing of oil and natural gas. Royale typically sells fractional working interests to accredited investors in wells drilled by Royale. Royale has its primary operations in the Sacramento and San Joaquin basins in California and has royalty interests in Alaska.