Oil and gas exploration company Pacific Asia Petroleum Inc. (PFAB.OB) today announced it has inked an amended agreement with Well Lead Group Ltd., in which Pacific Asia will acquire a 51 percent stake in several Well Lead-related onshore oil production companies in the People's Republic of China.
The agreement correlates with Pacific Asia's intentions on developing a wide range of energy operations, including alternative energies, in China. In September of 2008, Pacific Asia entered into an agreement with Well Lead regarding the sale and purchase of up to 39 percent of Well Lead's interests in Northeast Oil Development Company Ltd.
Since that time, Pacific Asia and Well Lead have altered the arrangement to expand the potential acquisitions to include more Well Lead interests in additional oilfields in China, bringing the aggregate acquisition to a 51 percent interest.
Frank C. Ingriselli, president and CEO of Pacific Asia, said his company looks at the revised agreement as an opportunity to generate cash flow and royalties.
“We are excited about this opportunity to expand the scope of our previous agreement with Well Lead. In this challenging time in the financial markets, we believe that this type of venture that minimizes cash expenses and capital exposure, yet provides even more upside and immediate cash flow, is the right way to go for Pacific Asia. This series of acquisitions can provide royalties from several onshore oil fields covering hundreds of wells, while at the same time giving us the ability to utilize this newly acquired technology to enhance production in fields throughout all of China (and elsewhere in Asia), he stated in the press release.
Additionally, Ingriselli noted that the acquisition is in line with Pacific Asia's business plan, and that the agreement is expected to benefit the company's shareholders.
We expect that this will provide a great framework for lost cost early production operations. These companies are already actively engaged in these activities and are generating revenues. These are the type of ventures that we believe fit well into Pacific Asia’s strategy and will help to deliver on our company’s business plan and grow shareholder value.”