2011-01-11-2011-01-10-2011-01-10

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
25MM
Description

Bought 2 E&Ps with assets 9,100 acres in S TX and 80% WI in E KS assets plus WI in 2 E&Ps with assets in various states, gaining 75 BO/d, 750,000 proved.

EnerJex Resources Inc., San Antonio, (OTCBB: ENRJ) has acquired multiple oil-related assets in Texas and Kansas through the purchase of two E&Ps for approximately $25 million in cash and stocks.

EnerJex issued $18.3 million in common shares, $4.8 million in series A preferred shares and $1.5 million in cash.

EnerJex has acquired non-operated working interests varying between 40%-49% in the El Toro oil resource project in South Texas through its acquisition of San Antonio-based Black Sable Energy LLC. EnerJex now leased 7,100 gross acres in this project and has completed nine vertical wells spanning a distance of approximately eight miles. Six of the nine wells are currently producing oil, one is awaiting stimulation and two are shut-in and expected to begin producing oil in 2011. Black Sable has retained deep rights covering approximately 1,000 contiguous acres in this project prospective for oil production from the Eagle Ford shale formation.

Black Sable has acquired leases covering approximately 2,000 acres in South Texas known as the Lonesome Dove project adjacent to the Giddings Field. Black Sable owns a 100% operated working interest in the shallow rights and a 10% non-operated working interest in the deep rights.

EnerJex believes the shallow rights are prospective for oil production from the Taylor Sand formation at a depth of approximately 4,500 feet and that 50 potential drilling locations exist.

Black Sable's joint-venture partner, which operates the deeper rights, is targeting the Austin Chalk and Eagle Ford formations and has completed three horizontal Austin Chalk wells on acreage adjacent to Black Sable's leases. Black Sable will be carried through the tanks by its joint venture partner for a 15% interest at no cost in the first deep well should its partner elect to drill on the company's acreage.

EnerJex has acquired an 80% operated working interest in numerous leases surrounding its existing oil producing assets in eastern Kansas through the acquisition of Kansas-based Working Interest Holdings LLC.

The newly acquired leases produce approximately 75 barrels of oil per day and have estimated proven oil reserves net to the company of approximately 750,000 barrels,. In addition, these leases have estimated probable and possible oil reserves of approximately 2 million barrels.

EnerJex has also acquired a 9% equity interest in Spindletop Oil & Gas Inc., Dallas, (OTCBB: SPND) and a 15% equity interest in Oakridge Energy Inc., Wichita Falls, Texas, (OTCBB: OAKR). Spindeltop, through its subsidiaries, holds approximately 86,448 gross acres under lease primarily in Texas, Oklahoma, New Mexico, Louisiana, Alabama, and Arkansas. Oakridge owns working interest in 23 producing wells in Texas and interest in a gravel property in Colorado.

EnerJex chief executive Robert Watson says, "Eastern Kansas represents a compelling opportunity to grow a substantial base of long life oil production and reserves with a low risk profile and attractive economics. Through this acquisition and the company's existing asset base we have identified more than 1,000 additional drilling locations, some of which we intend to drill deeper than the primary target to explore additional zones that may be productive and have yet to be tested."

CK Cooper & Co. was as financial advisor to EnerJex.