Royale Energy, Inc. (OTCMKTS:ROYL) Files An 8-K Completion of Acquisition or Disposition of AssetsItem 2.01Completion of Acquisition or Disposition of Assets
Royale Energy, Inc. (OTCMKTS:ROYL) Files An 8-K Completion of Acquisition or Disposition of Assets
On December 3, 2018, Royale Energy, Inc. (“Royale”) completed the previously announced acquisition of interests in oil fields from West Coast Energy Properties Limited Partnership (“WCE”), a privately held limited partnership, to a September 19, 2018 agreement with WCE (the “WCE Agreement”). Royale directly acquired non-operated interests in the Jameson North field in the Permian Basin in West Texas and the Big Mineral Creek field in the Marietta Basin in North Texas. Royale’s joint venture partner, RMX Energy, LLC (“RMX”), acquired non-operated interests in the Whittier field in the LA Basin and Bellevue field in the San Joaquin Basin in California.
Prior to completion of the acquisition, Royale entered into an agreement with its joint venture partner, RMX Energy, LLC (“RMX”), under which RMX assumed certain rights and obligations under the WCE Agreement with WCE. to the agreement between Royale and RMX:
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Royale acquired the Jameson North and Big Mineral Creek interests in Texas and has become the operator of the Jameson North field. If Royale sells the Jameson North and/or Big Mineral Creek interests within on or before December 3, 2019, RMX will be entitled to receive 50% of the sales proceeds. |
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RMX paid the agreed purchase price stated in the WCE Agreement to WCE and in exchange received the interests in the Whittier field and Bellevue field in California where Royale already has a joint venture with RMX Resources. Royale also assigned RMX an overriding royalty interest in the Jameson North interests, of 3% of production in excess of base production of 37 barrels of oil per day. If Royale sells the all of the Jameson North interests, the 3% override will terminate. |
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Royale retained the right to acquire up to 50% of the West Whittier and Bellevue California assets from RMX on or before December 31, 2018, on the same terms and conditions as RMX acquired them. |
An affiliate of Royale is currently the operator of the West Whittier and Bellevue leases. Royale agreed that if it is named the operator of those West Whittier and Bellevue lease interests which were acquired by RMX under the WCE Agreement, Royale will reduce its monthly management services fee, currently being paid to Royale by RMX, by $50,000 per month.
The WCE Agreement was previously filed with the SEC as Exhibit 2.1 to Royale’s Report on Form 8-K filed with the SEC on September 20, 2018, and the agreement between Royale and RMX Resources was filed with the SEC as Exhibit 10.31 to Royale’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018. The above discussion should be read in conjunction with these two agreements for a complete set of the terms and conditions of the acquisition.
Item 9.01Financial Statements and Exhibits
(d)Exhibits
| 2.1 |
Purchase and Sale Agreement between Royale Energy, Inc., and West Coast Energy Properties Limited Partnership, incorporated by reference to Exhibit 2.1 of Royale’s Form 8-K dated September 19, 2018, filed with the SEC on September 20, 2018. |
| 2.2 |
Acquisition Notification and Amendment between Royale and RMX Resources, LLC, incorporated by reference to Exhibit 10.31 of Royale’s Form 10-Q for the quarter ended September 30, 2018.. |
About Royale Energy, Inc. (OTCMKTS:ROYL)
Royale Energy, Inc. is an independent oil and natural gas producer. The Company is engaged in the production and sale of natural gas, acquisition of oil and gas lease interests and proved reserves, drilling of exploratory and development wells, and selling of fractional working interests in its wells to be drilled. The Company owns wells and leases located mainly in the Sacramento Basin and San Joaquin Basin in California, as well as in Utah, Texas, Oklahoma, Louisiana and Alaska. The Company sells a portion of the working interest in each well it drills or participates in to third party investors and retains a portion of the prospect for its own account. The Company owns proved developed producing and non-producing reserves of oil and natural gas in Utah, Texas, Oklahoma and Louisiana, as well as prospective shale oil property in Alaska. The Company has drilled over two wells in northern California.