Rango Signs LOI To Acquire Hangtown Energy

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
0MM
Description

To acquire company for shares, increasing interest in KMD, Elk Hills and Tapo Canyon leases.

Rango Energy Inc. (OTC: RAGO) entered into a non-binding letter of intent (LOI) to acquire Hangtown Energy Inc., the company announced on Aug. 15.

The acquisition includes all subsidiaries, equity interests, joint ventures and affiliated interests to which Hangtown is a party, including existing well bores and field operations. The company expects the acquisition to be completed on or before Sept. 30.

Under the terms of the LOI, Hangtown shareholders will exchange 100% of the issued and outstanding shares of Hangtown, representing 100% of the equity ownership of Hangtown, for US $6 million in cash in the merged entity for working capital, satisfaction of any remaining liabilities and 114 million shares of newly issued common stock in Rango Energy as set forth in the LOI. Hangtown's existing assets include leasehold interests in 12,500 acres in the San Joaquin and Ventura basins and five well bores drilled, but not completed. The company anticipates the acquisition will be classified as a tax-free reorganization under the internal revenue code.

General terms and provision for the LOI are as follows:

  • Rango will issue 114,000,000 newly issued shares of its common stock to Hangtown and complete its drilling commitments on KMD 17-18;
  • Vince Ramirez to become CEO of Rango Energy; and
  • Rango's economic interests in leases at Kettleman Middle Dome (KMD), Elk Hills and Tapo Canyon increase from 25% to 50% as it becomes the operator on all projects after the completion of the acquisition.

"After working with the Rango management team during the past several months, it has become clear that a combination of the two companies aligns our collective interests for optimizing production from the properties in our portfolio, while we continue the development of the Kettleman Middle Dome Project," said, Vince Ramirez, Hangtown Energy's CEO, in the release.

"We are very pleased to have come to terms with Hangtown Energy on combining the two companies. This acquisition will simplify our ownership structure, bring seasoned operators and scientists with 60 combined years of E&P experience in the San Joaquin Valley into the public company and produce significant economic benefits for shareholders in both the short and long run," said Harp Sangha, Rango Energy's CEO, in the release.

Rango Energy Inc. engages in the acquisition, exploration, and development of oil and natural gas properties in North America. The company is based in Vivian, La.