Recovery Energy, Inc. (OTCBB:RECV), an independent oil and gas exploration and production company with operations and assets in the Denver-Julesburg (DJ) Basin, today announces it has executed a purchase and sale agreement with Wapiti Oil & Gas, LLC to acquire oil and gas leases on 8,060 net acres in the Chugwater area of Laramie County, Wyoming for $12.3 million, payable in a combination of cash and stock. The acquisition will increase Recovery Energy’s Chugwater acreage to approximately 14,400 contiguous gross acres, 12,200 net after accounting for a 2,200-net acre effect to its recently announced joint-venture drilling partnership.
The Company also announces that it has closed on the acquisition of its previously disclosed purchase of oil and gas leases from various private individuals for $1.9 million, paid in a combination of cash and stock, on approximately 1,700 leasehold acres in the Grover Field and surrounding area in Weld County, Colorado, and approximately 6,600 net acres in Goshen County, Wyoming.
The combined acquisitions bring Recovery Energy’s DJ Basin holdings to 148,000 gross acres, 134,000 net acres.
“The Wapiti acreage is a meaningful, complementary in-fill acquisition for Recovery Energy. We now hold a contiguous block in excess of 14,000 acres in the Chugwater area, positioned in the middle of recent Niobrara Shale horizontal drilling activity,” said Roger A. Parker, Chairman and CEO of Recovery Energy.
The Wapiti Oil & Gas leasehold is primarily located northwest of the prolific Silo field, in Laramie County, Wyoming. Closing of the transaction is scheduled on or before March 4, 2011. Recovery Energy has filed for four horizontal well drilling permits, and is scheduled to commence its horizontal drilling program targeting the Niobrara oil shale formation on its Chugwater acreage by early second quarter of 2011.
“The acquisition in the Grover Field complements our positions throughout the northern half of the DJ Basin giving us significant exposure in what we believe will be both the matrix porosity and naturally fractured areas of the Niobrara Shale,” said Parker.