PORTLAND, OR -- (Marketwire) -- 02/21/12 -- Xun Energy, Inc. ("XNRG") (OTCBB: XNRG) announces that its wholly owned subsidiary, Xun Oil Corporation (Xun Oil), accepted a Commercial Loan Offer which provides in part for Xun Oil to receive from PRIVATE COLLATERAL LENDERS CORP. (PCLC) US$33,000,000 in financing for the acquisition of the West Crockett Oil and Gas Leases (West Crockett) and the future development of West Crockett.
The financing will be used to acquire West Crockett in Crockett County, Texas, which is under contract through Crockett Energy Corporation, a company that Xun Energy, Inc. announced the acquisition of with its SEC 8-K filing on February 15, 2012.
West Crockett consists of 2,320 acres which has 17 active oil wells producing 1,900 to 2,500 barrels of premium crude oil per month from the San Andres and Queens formations in the Clara Couch Fields of the Permian Basin. The leases also include 2 injection wells, 24 Proven and Undeveloped (PUD) wells and 66 probable locations. A recent independent 3rd party geological and reservoir study indicates that West Crockett has a proven reserve of 1.6351 million barrels and probable reserves of 1.6264 million barrels of crude oil. West Crockett has been producing crude oil since 1941 with an average historical decline curve of 2%.
Closing of the financing transaction is subject to the satisfaction of conditions precedent including but not limited to: Property and public liability insurance including all risk insurance (with extended coverage endorsement) on the Borrower's real and personal property as required including lands, buildings, equipment and inventory in amounts and from an insurer acceptable to PCLC showing PCLC as low payee or mortgagee by way of standard mortgage endorsement, a refundable by guarantee Commercial Loan Underwriting Fee to PCLC of $360,000 CDN, confirmation that all Federal Revenue Agency accounts of the corporation are current, evidence that all business taxes are paid to date, and documentation to include, but not limited to the following:
- Professional Evaluation showing full debt-service capacity of wells. (Security).
- Résumé of Evaluator of Crockett (Texas) oilfields Property.
- Stock Ownership Documentation.
- Assignment Letter from the Owner of said properties.