SAN FRANCISCO, June 6, 2011 /PRNewswire/ -- GeoPetro Resources Company (NYSE Amex: GPR) ("GeoPetro", "we", "our" or the "Company") is pleased to announce that on May 31, 2011, its wholly-owned, indirect subsidiary, Madisonville Midstream LLC ("MML"), entered into an Amendment to the April 1, 2011, Equipment Purchase and Sale Agreement ("Amended PSA") with Peregrine Midstream Partners LLC ("Peregrine") for the sale of certain idle and non-income producing gas treatment plant equipment from our Madisonville Project located in Madison County, Texas. Under the Amended PSA, the Purchase Price of the equipment has been increased from $8,750,000 to $9,300,000, and the closing of the transaction is no longer subject to regulatory approval. A deposit of $150,000 of the Purchase Price was paid by Peregrine on April 1, 2011, an additional deposit of $150,000 was paid by Peregrine on May 31, 2011, and additional deposits will be paid by Peregrine monthly until closing, which shall take place on or before September 29, 2011. The deposits are non-refundable (except for a material breach of the Amended PSA by Madisonville), though they will be credited against the Purchase Price upon closing.
Under the Amended PSA, in the event that closing occurs on or before July 31, 2011, the Purchase Price shall be reduced from $9,300,000 to $9,100,000 and further, in the event the closing occurs on or before August 30, 2011, the Purchase Price shall be reduced to $9,200,000. The closing cannot be any later than September 29, 2011.
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.