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Permex Petroleum Corporation Reaches Definitive Agreement to Acquire 7,800-Acre Transformational Oil and Gas Asset in the Heart of the Permian Basin of West Texas

By on October 4, 2021 0

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Transaction Almost Triples Permex’s Footprint Owned by Production Assets to Approximately 12,000 Acres

Vancouver, British Columbia – (Newsfile Corp. – October 4, 2021) – Permex Petroleum Corporation (CSE: OIL) (OTCQB: OILCF) (“Permex“or the”Society“), a leading junior oil and gas company, has entered into a definitive purchase and sale agreement (“Message of public interest“) with Pratt Oil Company, LLC, Rockport Permian, LLC and Petro America Resources, LLC (the”Seller”) for the purchase of all of the seller’s rights, titles and interests in the Mabee Breedlove Clearfork unit, the Mallard Breedlove lease, the Carter Clearfork lease and the Erwin Eoff lease (the “Assets”) located in Martin County, Texas.

The properties span 12 contiguous sections for a total of 7,870.23 gross acres and 7,741.67 net acres, 98% of which is owned by Production (“HBP”) in the heart of the Permian Basin. There are a total of 25 vertical wells of which 12 are producers, 4 are saltwater drainage (“SWD”) wells and 9 are closure opportunities.

“This acquisition fits directly into our strategy of acquiring and developing high quality assets with an exceptional economy in the Permian Basin, one of the most vital energy producing regions in the United States,” said said Mehran Ehsan, President and CEO of Permex Petroleum. “With an average operating breakeven price of $ 28.14 per barrel over the past 12 months, this acquisition carries extremely low production risk and a high profit margin. As companies such as Diamondback Energy continuously drill and produce daily volumes in excess of 1,200 barrels of oil equivalent (“BOEPD”) per well from the Spraberry formation directly adjacent to the lease, our technical team is very excited to the idea of ​​starting the assessment of this area of ​​opportunity so that Permex can begin its drilling program. acreage of oil and gas assets, we are nearing an inflection point in our operational strategy, ultimately positioning Permex for sustainable and long-term growth. “

The field is currently producing from the Clearfork formation at depths of approximately 7,000 feet, which carries the Upper, Middle and Lower Clearfork zones within the boundaries of the lease. Permex management believes that there are significant additional formations and areas upstream and downstream in the field, including the San Andres Formation over the entire acreage and the much sought-after Spraberry Formation over part of the acreage. In addition to the appraisal by Permex’s in-house engineers, Permex retained the services of an independent engineering firm to further assess the reserves attributable to the property beyond the Proved Developed Producing (“PDP”) reserves associated with the property. Clearfork training identified by previous operators.

Permex will bear 100% of the direct interest (“WI”) and 81.75% of the interest on net income (“NRI”) in the oil and gas assets. Under the terms of the PSA, the Company acquires the assets for US $ 2.0 million in an all-equity transaction at a price of C $ 0.10 per share and 1/2 warrants exercisable at 0.20 CA $, for a total of 25,000,000 shares and 12,500,000 warrants. The warrants have an expiration date of October 1, 2031, subject to acceleration by the Company, from the third anniversary of the date of issue.

Final PSA follows initial execution of a non-binding letter of intent (“LOI”) announced by the Company on September 13e, 2021.

About Permex Petroleum Corporation

Permex Petroleum (CSE: OIL) (OTCQB: OILCF) is a uniquely positioned junior oil and gas company with assets and operations in the Permian Basin of West Texas and the Delaware Sub-Basin in New -Mexico. The company is focused on combining its low-cost development of assets owned by production for sustainable growth with its current and future Blue-Sky projects for large-scale growth. The company, through its wholly owned subsidiary, Permex Petroleum US Corporation, is a licensed operator in both states; and owns and operates private, state and federal lands. For more information, please visit www.permexpetroleum.com.

CONTACT INFORMATION
Permex Oil Company
Mehran Ehsan
President, CEO and Director
(214) 459-2782

Scott Kelly
Chief Financial Officer, Corporate Secretary and Director
(778) 373-5421

Or for investor relations, please contact:
Brooks hamilton
[email protected]

DISCLAIMER:

Neither the Canadian Securities Exchange, OTCMarkets nor their regulatory service providers (as that term is defined in their respective policies) accepts responsibility for the adequacy or accuracy of this release.

Forward-looking statements

The information contained in this press release may involve forward-looking statements under applicable securities laws. The forward-looking statements contained in this document are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. , except as expressly required by applicable securities legislation. Although management believes that the expectations represented in these forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein and, therefore, you should not place undue reliance on them. Neither the CSE, the over-the-counter markets, nor their regulatory service providers (as that term is defined in the policies of either exchange) accepts responsibility for the adequacy or accuracy of this release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/98407