GeoPetro Resources Company Enters Into Major Transaction to Return Madisonville Project to Production

Rhea-AI Summary

GeoPetro Resources Company (OTC:GEOR) has entered into definitive agreements with Promise Energy Madisonville, LLC to re-open the gas processing facility and resume production at the Madisonville Project in Texas. Effective March 23, 2021, Promise Energy will assume liabilities, including property taxes and well decommissioning obligations. GeoPetro will receive a 20% net profits interest from hydrocarbon projects and a 12.5% interest from any data center projects undertaken by Promise Energy. This collaboration aims to restore the project's operational capacity and ensure gas production.

Positive

• Re-opening of the Madisonville gas processing facility will enhance production capabilities.
• GeoPetro secures a 20% net profits interest from hydrocarbon projects.
• Partnership with Promise Energy may lead to improved operational efficiency.

Negative

• None.

SAN FRANCISCO, March 30, 2021 (GLOBE NEWSWIRE) -- GeoPetro Resources Company and its subsidiaries (OTC:GEOR) ("GeoPetro" or the “Company”) are pleased to announce that the Company has entered into definitive agreements (the “Agreements”) with Promise Energy Madisonville, LLC (“Promise Energy”), which provide amongst other things, that Promise Energy will re-open the gas processing facility and return the Madisonville Project located in Madison County, Texas to production. The effective date of the transactions is March 23, 2021 (the “Effective Date”).

The Company has contributed its Madisonville assets to Promise Energy in exchange for the following:

1. Promise Energy has assumed from the Company and shall pay and perform the following:
   1. all Liabilities that arise out of or are attributable to the ownership or operation of the Madisonville Project, to the extent arising after the Effective Date; and
   2. GeoPetro’s obligations with respect to:
      1. any outstanding county and state property taxes,
      2. the eventual plugging and abandonment of the Magness #1 well, Fannin #1 well, Mitchell #1 well, Wilson #1 well, and the acid gas disposal well, and the eventual decommissioning and abandonment of the sour gas processing plant; and
      3. all obligations with respect to gas production and sales, whether attributable to periods prior to, on or after the Effective Date.
   3. certain other past due claims and indebtedness of the Company; and
   4. funding and carrying out a Work Program in a timely and expeditious manner by Promise Energy which will consist of the following:
      1. Obtain new mineral leases covering the Madisonville Gas Field area. The new leases will include the Rodessa Formation and all additional depths above and below that can be reasonably leased from the mineral owners.
      2. Operate the Madisonville Gas Field for production and sale of natural gas from the new leases, including assuming liability for operation of the four existing gas wells and the sour gas injection well previously operated by Redwood Energy Production, L.P., plus any new wells drilled on the new leases.
      3. Evaluate and undertake a work program for the repair and restoration of the Madisonville Project to operation, production and sale of natural gas. 
2. GeoPetro will receive and enjoy a carried interest in the Madisonville Project, as follows:
   1. a twenty percent (20.0%) Net Profits Interest from Hydrocarbon Projects of Promise Energy; and
   2. a twelve and one-half percent (12.5%) Net Profits Interest from Data Center Projects of Promise Energy, if such a project is undertaken.

About GeoPetro

GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California.

Cautionary Note Regarding Forward-Looking Statements

Certain items in this press release and other information GeoPetro provides from time to time may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not necessarily limited to, statements relating to future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “target,” “projects,” “contemplates” or the negative version of those words or other comparable words. Any forward-looking statements contained in this press release are based upon GeoPetro’s historical performance and on GeoPetro’s current plans, estimates, and expectations in light of information currently available to GeoPetro. Such forward-looking statements are subject to various risks and uncertainties and assumptions relating to GeoPetro’s operations, financial results, financial condition, business, prospects, growth strategy, and liquidity. For a discussion of such risks and uncertainties, see “Risk Factors” included in GeoPetro’s Annual Report on Form 10-K. Furthermore, GeoPetro is under no obligation to update or alter any of the forward-looking statements contained in this press release as a result of new information, future events or otherwise, unless required by law.

No stock exchange or regulatory authority has approved or disapproved of the information contained herein.                                      

FAQ

What is the recent agreement between GeoPetro and Promise Energy?

GeoPetro Resources Company has entered into agreements with Promise Energy to re-open the Madisonville Project gas processing facility and resume production.

When did the agreements between GeoPetro and Promise Energy take effect?

The agreements took effect on March 23, 2021.

What financial interests does GeoPetro gain from Promise Energy?

GeoPetro will receive a 20% net profits interest from hydrocarbon projects and a 12.5% interest from data center projects undertaken by Promise Energy.

What will Promise Energy be responsible for under the agreement with GeoPetro?

Promise Energy will assume all liabilities associated with the Madisonville Project, including past due claims, property taxes, and costs for well plugging and abandonment.