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Radial Energy, Inc. Signs MOU to Acquire 100% of Rancho Hermoso S.A.
Tuesday March 6, 4:28 pm ET
HOUSTON, TX--(MARKET WIRE)--Mar 6, 2007 -- Radial Energy Inc. (OTC BB:RENG.OB - News) ("Radial" or the "Company") wishes to advise that Radial Energy Inc. along with 100% of the shareholders of Rancho Hermoso S.A. have signed a Memorandum of Understanding ("MOU") as a required step towards closing the acquisition of all Rancho Hermoso S.A. shares and assets.
Rancho Hermoso is a recognized privately held Colombian corporation with an excellent operational record of accomplishment engaged in the exploration and production of oil and gas within the Republic of Colombia. This commitment to excellence is reflected by their ongoing HSES compliance as well as efforts to achieve ISO 9001 and 14001 certification. With this planned acquisition, Radial Energy quickly moves towards the completion of the second stage of its strategy in Colombia.
Radial Energy's investment further positions the Company as operators of the Rancho Hermoso projects with the likely near term return being a quantifiable boost in overall performance of its production assets. In addition, the transaction brings significant human resource benefits incorporating a skilled and well-trained team familiar with the environment, equipment, and conditions.
The MOU outlines the agreement in its entirety including total price of the transaction, payment schedule and payment mechanisms. It also defines that a Stock Purchase Agreement (SPA) shall be signed within the next 30 days. The executed MOU regulates the terms and conditions of the transaction, with the closing scheduled to take place no later than June 15th 2007.
Radial has confirmed that Rancho Hermoso's current performance is consistent with its previously stated operating plans, and the current focus of effort is on a general workover program encompassing three Entrerrios field wells and completion of a promising Rancho Hermoso field well. The intention is to open production on additional horizons in the Ubaque and Mirador formations to increase overall oil production.
The work plan has already started, resulting in a 400 BOPD oil production increase in the ER-3 well. The workover/completion program is expected to be finished by mid April with
an anticipated incremental increase of oil production of up to 2000 BOPD thereby targeting an estimated total production of 6000 BOPD
Radial Chief Operating Officer Omar Hayes comments, "Excellence in operations, social responsibility, and HSES culture are the basis of the business performance that Radial has identified for itself since our inception. Rancho Hermoso is a company that dovetails with our vision and brings a vital synergy that will propel our strategy for sustainable and profitable growth."
About Radial Energy Inc. (OTC BB:RENG.OB - News)
Radial Energy identifies, acquires, and develops low risk oil and natural gas exploration and development opportunities throughout the Americas. The Company's innovative strategy involves targeting overlooked or under-developed reserves that are under the radar of multinational oil companies and out of the reach of small independents.
The Company targets prospective oil and natural gas opportunities in historically productive regions with a focus on identifying previously drilled but undeveloped exploratory wells that, due to factors at the time of initial drilling including the absence of pipeline infrastructure, lack of modern recovery technology, poor geological or engineering interpretation or low oil and gas prices, were not fully exploited.
Radial Energy is led by a highly motivated team of industry veterans with proven expertise in North, Central and South American oil and natural gas development. Bolstered by first-rate management, farsighted acquisitions, the speed and agility to take advantage of changing market conditions, a firm commitment to building value for shareholders and the growing demand for energy worldwide, Radial Energy is taking maximum advantage of a tremendous opportunity to develop overlooked and under-developed oil and gas reserves in North and South America.
Forward-Looking Statements
Except for statements of historical fact, the information presented herein contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include the statements regarding the Company's expectations, hopes or intentions regarding the future. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include the ability to successfully drill and complete wells such as the Huaya 100-1X well, general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund future operations, and changes in consumer and business consumption habits and other factors over which Radial Energy Inc. has little or no control.
ON BEHALF OF THE BOARD
Radial Energy Inc.
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G. Leigh Lyons, President
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