Aroway Energy Edges Up As Joins JV Partner in Buying Lands
Aroway Energy Inc. (ARW.V) announced that the company and its joint venture partner have outright acquired a portion of the lands that comprised the rolling farmout agreement that the partnership entered into in February of this year with a private oil and gas company.
The acquisition consists of 24 sections of land. The partnership is only required to pay approximately a 6% royalty on production from the acquired lands to the vendor as opposed to the variable royalty of 7.5% to 12.5% under its previous agreement. Total consideration paid to the Vendor for the acquisition was $661,637 ($330,818 net to Aroway).
Chris Cooper, President & CEO, said: "This acquisition falls in line with the Company's strategy to build and control our existing land base in our core area. The Partnership will capitalize economically almost immediately with the royalty payments cut in half in some cases on certain wells going forward, which will benefit Aroway's bottom line."
Aroway paid 50% of the total consideration for the acquisition, and will pay 50% of all costs associated with the development of the lands to earn 50% of all revenue generated.
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