PetroShare Corp. (ticker: PRHR) today announced it has entered into a purchase and sale agreement with an independent third party seller to acquire oil and gas leases totaling approximately 5,879 gross (2,930 net) acres, with an average net revenue interest of 84%, located in Weld and Adams Counties, Colorado. The total purchase price for the leases and associated assets is $2.582 Million. The company’s strategic partner and lender, Providence Energy Operators, LLC, has agreed to purchase a 50% interest in the assets, reducing the company’s interest in the agreement to 1,465 net acres. The company will pay approximately $460,000 in cash and issue 450,000 shares of its common stock to the seller for its 50% share of the acquisition.
The agreement covers approximately 1,171 net acres located in the Northeastern core of the Wattenberg Field in Weld County. The company believes these leases have the potential for between 20 and 30 gross Niobrara and Codell standard and extended length horizontal wells. The remaining 1,759 net acres covered by the agreement are located in Adams County in the Southeastern portion of the DJ Basin, where the company has been actively expanding its footprint since entering the basin in 2015. Upon closing, the company will have an interest in nearly 10,000 net acres across the play.
The purchase and sale agreement has an effective date of January 1, 2017 and the company expects to close the transaction in late March 2017, subject to conducting customary due diligence.
