VKIN, through its wholly owned subsidiary, Mid-Con Petroleum, already owns a majority working interest in the lease, and the LOI is intended to acquire the interest of a minority partner with the affect of achieving greater efficiencies for future development, as well as to potentially increase Mid-Con's revenue streams from existing production.
Expanding Eastern Kansas Corridor
Specific to this proposed LOI, VKIN will be looking to take advantage of an operational lease located in Miami County, which produces oil from the Squirrel sandstone (750-900 FT) within the Cherokee formation. The finalized purchase would include an increased and undivided interest in all oil and gas wells, equipment, fixtures, and other personal property located upon the leased property.
Similar size and styled wells on this lease have proven production value that have shown the ability to produce oil for over 20 years, with some production extending beyond 30 years of consistent production capacity.
While the LOI is non-binding, it proposes that VKIN and the vendor enter into a formal purchase agreement prior to the end of day on March 15, 2017. The deal is subject to VKIN and Mid-Con obtaining financing sufficient to complete the purchase.
VKIN is an independent contractor and owns approximately 6000 acres of land in Kansas and Missouri, with additional ownership interest of oil and gas leases in Alberta.
Company management has been aggressively seeking out investment opportunity that is designed to deliver both increased asset ownership and shareholder value. Coming off of a momentum building 2016, management now appears to be taking advantage of the foundation that was put in place to facilitate an efficient and cost-effective growth model. With this LOI, VKIN is further positioning themselves to take advantage of opportunity within the Mid West corridor, namely Kansas and Missouri.
VKIN may be able to facilitate the closing of this LOI by taking advantage of its relationships with private investors, investment banks, and through the use of its of established credit facilities from lenders familiar with the oil and gas sector.
As CNA Finance pointed out in the first week of February, VKIN has established an initial footprint in the mid west region that may provide the near term impetus that can allow the company to gain additional leverage and traction as they progress through 2017.
In the meantime, as with any micro cap name, stay focused to fundamentals and remain appraised of any additional news through CNA Finance, your source for VKIN breaking news.
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