LAS VEGAS, Oct. 18 /PRNewswire-FirstCall/ -- Consolidation Services Inc. ("CNSV" or the "Company") (OTC Bulletin Board: CNSV), an exploration and production company engaged in the acquisition, operation and development of domestic oil and natural gas, announced today that it has, through its wholly owned subsidiary CSI Energy, Inc., entered into a definitive Purchase and Sale Agreement ("PSA") to acquire certain assets from Grayson Services, Inc. and RMR Energy Resources. The assets consist of oil & gas leases, equipment and operations located in Kern and Santa Barbara Counties and represent ongoing current production equal to 265 barrels of oil per day and 485 mcf per day of natural gas. The six leases currently have 54 producing wells on over 2,250 acres. The producing zones include the Antelope Shale, Montery Chert, and Sisquoc Sand.
The Company previously announced, on June 1, 2010, that it had entered into a non-binding Letter of Intent to acquire these assets. The PSA memorializes the terms of that acquisition. The all-cash purchase price of the oil and gas fields, leases and operations is $35 million but could be adjusted in accordance with the terms of the PSA. If completed, the acquisition will represent a significant and material increase in current production, proven reserves and revenue for CNSV.
Company President, Gary Kucher stated that: "Historical well data and third party reports indicate that these oilfields have been significantly underdeveloped. We have designed exploitation plans for each property utilizing the latest petroleum engineering techniques. Through a strategy of in-fill drilling and the conservative deployment of commercially-proven oil field stimulation techniques, these new plans should enhance the recovery of proved reserves and prime the exploitation of the substantial unproved reserves of the acquisition."
Consummation of the transaction is slated for December 2010, however it is subject to the satisfactory completion of due diligence, financing and other customary closing conditions.About CNSV: Founded in 2007 and based in Las Vegas, Nevada, Consolidation Services Inc. is engaged in the acquisition, operation and development of domestic oil and natural gas production. The Company currently owns oil and gas wells along with oil and gas mineral rights on approximately 13,500 acres in eastern Kentucky and Tennessee. Consolidation Services, Inc. is attempting to build shareholder value through further acquisition and development of domestic energy resources. For more information, please visit: consolidation-services.net or csi-energy.net