EMPIRE PETROLEUM CORPORATION (OTCMKTS:EMPR) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02 Termination of a Material Definitive Agreement
Empire North Dakota LLC, a Delaware limited liability company and wholly owned subsidiary of Empire Petroleum Corporation (“Empire North Dakota”), entered into a purchase and sale agreement dated as of March 3, 2020 (the “Purchase Agreement”), with Ovintiv USA Inc., Ovintiv RMI LLC, Ovintiv Production Inc. and Ovintiv Exploration Inc. (collectively, “Seller”), to which, among other things, Empire North Dakota agreed to acquire certain oil and gas properties from Seller in Montana and North Dakota comprising of 94 gross wells and approximately 35,900 gross acres (26,600 net acres) in Richland County, Montana and McKenzie County, North Dakota. The oil and gas assets are primarily located in and around Richland County, Montana and produce from the Bakken and other conventional reservoirs. to the Purchase Agreement, (i) the purchase price was $8,500,000 (subject to customary adjustments), (ii) Empire North Dakota wired a deposit of $850,000 to Seller on March 3, 2020 using cash on hand, and (iii) the closing date was scheduled to be April 30, 2020.
On April 29, 2020, Empire North Dakota sent a notice of termination and/or recission of the Purchase Agreement to Seller, which also demanded a return of the Deposit (the “Notice of Termination”). The Notice of Termination stated, in part, termination and/or recission was necessary because governmental orders related to the COVID-19 pandemic had restrained or prohibited the transactions contemplated under the Agreement and rendered Empire North Dakota’s full performance thereunder impracticable and/or impossible.
On May 5, 2020, Seller sent a letter to Empire North Dakota disputing its right to terminate the Purchase Agreement.
On June 4, 2020, Seller sent a letter to Empire North Dakota stating Empire North Dakota had breached the Purchase Agreement, and Seller was terminating the Purchase Agreement and retaining the Deposit as liquidated damages.
On June 23, 2020, Empire North Dakota sent a letter to Seller stating, among other things, it agreed with Seller that the Purchase Agreement had been terminated, but again demanding the return of the Deposit.
About EMPIRE PETROLEUM CORPORATION (OTCMKTS:EMPR)
Empire Petroleum Corporation is engaged in exploration and development of oil and gas interests. The Company did not own any interest in oil and gas properties or equipment. The Company continues to seek partners to help it explore and develop oil and gas interests. The Company does not have any producing wells. The Company owned a working interest in oil and gas leases in Nye County, Nevada (the Gabbs Valley Prospect). The Company owned a working interest in oil and gas leases in Natrona County, Wyoming (the South Okie Prospect). The Company owned options to acquire approximately 160,000 gross leasable acres in South Dakota and North Dakota. The Company has no revenue.