(PublicWire) — Signature Exploration and Production Corporation (OTCBB: SXLP), an independent energy company engaged in the exploration, development, exploitation and acquisition of oil and natural gas properties in the U.S., announced today that it has entered into a letter of intent with EnerJex Resources (“EnerJex”) to form a joint venture partnership in a lease (“Lease” or “the property”) located in Franklin County, Kansas.
The Lease lies on 214-acres and currently has 24 producing oil wells, two (2) water injection wells and two (2) temporarily abandoned, previously producing wells. According to an independent engineering assay report issued in 2008, cumulative production on the property was 64,499 barrels of oil, and estimated total probable reserves were 91,845 barrels of oil.
Under the terms of the letter of intent, Signature would purchase an un-divided 90% working interest in the Lease’s assets for $1.5 million. As Signature’s joint venture partner, EnerJex would manage the purchase of the Lease and development and operations thereof for a one-time management fee. EnerJex would retain the remaining 10% working interest. Once Signature has received $3 million, through the sale of oil at the property, EnerJex would receive an additional 15% working interest, resulting in an after-adjustment ownership of 75% Signature/25% EnerJex. The transaction is expected to close on or before May 15, 2010, subject to the completion of the agreements, due diligence and financing.
“The Lease is a major turning point for the Company and our shareholders. Upon the close of the transaction, Signature is poised to begin generating revenues from a number of the site’s oil producing wells. In addition, we may have room for immediate expansion, including bringing the two shut-in wells online,” said Steven Weldon, Chairman and CEO of Signature Exploration and Production Corp. “The Lease is a major step forward in diversifying our asset base and creating the potential for strong operating cash flows in 2010.”
C. Stephen Cochennet, CEO of EnerJex Resources, Inc., stated, “In response to economic conditions and capital market constraints, we have recently begun to explore and evaluate various strategic industry alliances that can continue to exploit our properties. Signature Exploration is an ideal partner to help us further develop our current leases as we continue to grow production and reserves in the mid-continent region of the United States.”
About EnerJex Resources, Inc.
EnerJex is an oil and natural gas acquisition, exploration and development company formed in December 2005. Operations, conducted solely through EnerJex Kansas, its wholly owned operating subsidiary, are focused on the mid-continent region of the United States. EnerJex acquires oil and natural gas assets that have existing production and cash flows. Once acquired, EnerJex implements an exploration and development program to accelerate the recovery of the existing oil and natural gas as well as explore for additional reserves. More information on EnerJex and its operations can be found on its website: www.EnerJexResources.com.
About Signature Exploration and Production Corp.
Signature Exploration and Production Corp. is an independent energy company engaged in the exploration, development, exploitation and acquisition of on-shore oil and natural gas properties in conventional producing areas along the gulf coast of Texas. Management’s strategy is to continue making acquisitions of select properties that have been identified as economically attractive, technically and geologically sound and have significant upside potential.
This news release contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities and Exchange Act of 1934, as amended. Statements in this news release, which are not purely historical, are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. These statements involve risks and uncertainties, which could cause actual results to differ materially from those in the forward-looking statements contained herein. Such risks and uncertainties may include, but are not limited to, the impact of oil and gas prices, the ability to manage growth and acquisitions, equipment or human resources, the effect of economic and business conditions, the ability to attract and retain skilled personnel and factors outside the control of the Company. These forward-looking statements are made as of the date of this news release, and the Company assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although the Company believes that the beliefs, plans, expectations and intentions contained in this news release are reasonable, there can be no assurance those beliefs, plans, expectations or intentions will prove to be accurate. Investors should consider all of the information set forth herein and should also refer to the risk factors disclosed in the Company’s periodic reports filed from time-to-time with the United States Securities and Exchange Commission. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.