Eagle Energy Trust’s US operating subsidiary has entered into a binding agreement to sell its entire working interest in its oil and natural gas properties in the Permian Basin, located near Midland, Texas, to an undisclosed buyer for cash consideration of $US 140 million before closing adjustments (the "Disposition").
The Disposition is expected to close on August 29, 2014, with an effective date of July 1, 2014. Eagle will receive a deposit representing approximately 5% of the disposition price.
"We are pleased with the results of our process to monetize the Permian Basin asset." said Mr. Richard Clark, President and Chief Executive Officer of Eagle. "Since our acquisition of this asset, the Permian Basin has developed into a major play in the United States. However, the capital required to execute this play has also risen substantially, making it unsuitable for development within acceptable leverage parameters for the Trust. We explored multiple financing options and undertook a robust private process to monetize the asset. As a result, we were able to capitalize on its value and realize substantial liquidity for the Trust. This will allow Eagle to re-deploy capital on other assets expeditiously with a view to significantly improve Eagle's sustainability and lower our payout ratio.