Escalera Resources Co. has entered into a letter agreement (the "Letter Agreement') to jointly initiate the development, construction and operations of a gas-to-liquids (GTL) plant to be located in Cheyenne, Wyoming (the "GTL Plant").
Escalera Resources Co. ("Escalera" or the "Company") and Wyoming GTL, LLC ("WYGTL") will jointly own Escalera GTL, LLC ("EGTL"), through which the initial phase of the GTL Plant will be executed. Under the Letter Agreement, WYGTL will assign all development and engineering plans, contracts, rights, technical relationships, among other rights (collectively, the "Rights") to EGTL, and the Company will fund up to $2 million to EGTL, subject to Board approval. These funds will be used for feasibility studies and completion of the initial engineering and development plans for the GTL Plant.
The Letter Agreement will terminate within 180 days (or on November 26, 2014) if a definitive agreement between the Company and WYGTL has not been completed.