SAN FRANCISCO, April 7, 2011 /PRNewswire/ -- GeoPetro Resources Company (NYSE Amex: GPR) ("GeoPetro", "we", "our" or the "Company") is pleased to announce that its wholly-owned, indirect subsidiary, Madisonville Midstream LLC ("MML"), entered into a Purchase and Sale Agreement (the "Agreement") on April 1, 2011 with Peregrine Midstream Partners LLC ("Peregrine") whereby MML has agreed to sell certain idle equipment ("assets") at its Madisonville Treatment Plant located in Madisonville, Madison County, Texas for $8,750,000.
Peregrine's plan in acquiring the assets is to integrate them into an underground storage project that a Peregrine subsidiary is developing in Wyoming.
The basic terms of the Purchase and Sale Agreement are as follows:
- GeoPetro's wholly owned indirect subsidiary, Madisonville Midstream LLC, will sell certain idle equipment at the Madisonville Plant to Peregrine for $8,750,000 (the "Purchase Price").
- Peregrine will pay the Purchase Price to the Company in the installments as follows:
- The first installment of $150,000 was tendered upon execution of the PSA. This first installment is non-refundable except for a material breach of the Agreement by the Company.
- The second installment of $8,600,000 (the "Closing Payment") is to be tendered on or before May 31, 2011.
- If regulatory approval to develop an underground gas storage project has not been received by Peregrine by May 31, 2011, Peregrine has an exclusive option to extend the due date of the Closing Payment up to 45 days to July 15, 2011.
- If Peregrine exercises this option to extend the due date, then Peregrine shall pay an option payment of $150,000. This payment is non-refundable except in the case of a material breach of the Agreement by MML.
- If the Closing has not occurred on or prior to June 15, 2011, Peregrine shall make a payment of $2,315.07 per day to MML for each day after June 15, 2011, until the Closing or the termination of the PSA.
The sale of idle equipment at the Plant does not impact current treatment capacity to treat production of natural gas from the Rodessa Formation in the Madisonville Field.