UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: October 17 , 2018
(Date of earliest event reported)
Royale Energy, Inc.
(Exact name of registrant as specified in its charter)
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DELAWARE |
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000-55912 |
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81-4596368 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
1870 Cordell Court, Suite 210
El Cajon, California 92020
(Address of principal executive offices) (Zip Code)
(619) 383-6600
(Registrant’s telephone number, including area code)
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(Former name or former address, if changed since last report) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On October 17, 2018, Royale Energy, Inc., entered into a Participation Agreement with California Resources Petroleum Corporation (“CPRC”) to conduct a three year, 30 well development program on CPRC’s properties in the Rio Vista Field in the Sacramento Basin of northern California. Under the Participation Agreement, Royale will earn interests in individual wellbores and income from wells it drills on the subject properties over the three year period through December 1, 2021.
Rio Vista is the largest dry gas field in California. It has produced approximately four trillion cubic feet of natural gas from more than fifteen stacked gas reservoirs. The agreement provides Royale up to three years to drill any of these fifteen stacked reservoirs over CPRC’s acreage.
The Participation Agreement obligates Royale to either drill and complete at least eight wells or to spend $9,000,000 in well costs on the subject properties in year one of the Participation Agreement, ending on December 1, 2019. Once a well is drilled, CPRC will deliver an undivided 60% of CPRC’s right, title and interest in the completed well. The Participation Agreement contemplates that Royale must drill at least four wells in year one (and each one year term thereafter if the term is extended into the next one year term) or pay liquidated damages to CPRC to continue the contract from year to year during the three year term.
If Royale agrees to sell any or all of its interests acquired under the Participation Agreement, CPRC has a right of first refusal to purchase those interests at the same price and terms as those under which Royale has agreed to sell its interests. There is a risk that the right of first refusal might make it more difficult for Royale to sell its interests acquired under the Participation Agreement, should it desire to do so.
Royale and CPRC have also entered into an operating agreement governing the parties’ rights and obligations to drill, complete and operate the wells to be drilled under the Participation Agreement.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
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99.1 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ROYALE ENERGY, INC. |
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Date: October 23, 2018 |
By: |
Stephen M. Hosmer |
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Name: |
Stephen M. Hosmer |
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Title: |
Chief Financial Officer |
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Exhibit 99.1
Royale signs joint venture to EXPAND DRILLING in Rio Vista Field
October 22 , 2018 -- San Diego, Californ ia – Royale Energy, Inc. (OTCQB : ROYL) , announces it has entered into an agreement to drill 30 wells throughout the Rio Vista field, the largest dry gas field in California. The agreement will provide Royale up to 3 years in which to drill to any of the multiple, stacked productive formation in this prolific and historic property. The Rio Vista field was discovered in 1936 and has produced approximately 4 trillion cubic feet from more than 15 stacked gas reservoirs.
This new agreement expands the joint venture development area to the entire Rio Vista field. Royale will now have access to a larger area and more reservoirs to drill lower risk infill development wells, with significantly larger reserves, than had been available under prior agreement. Royale’s ability to drill low risk undeveloped reserves has increased by an order of magnitude in a prolific, underdeveloped gas field.
The joint venture will lead to multiple years of drilling activity at Rio Vista at a time of upward trending natural gas prices due to declining natural gas inventories nationwide.
About Royale Energy. Inc.
Royale Energy, Inc. (OTCQB: ROYL) is an independent exploration and production company focused on the acquisition, development, and marketing of oil and natural gas. The Company has its primary operations in California’s Los Angeles and Sacramento Basins.
Forward-Looking Statement
In addition to historical information contained herein, this news release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, subject to various risks and uncertainties that could cause the company’s actual results to differ materially from those in the “forward-looking” statements. While the company believes its forward looking statements are based upon reasonable assumptions, there are factors that are difficult to predict and that are influenced by economic and other conditions beyond the company’s control. Investors are directed to consider such risks and other uncertainties discussed in documents filed by the company with the Securities and Exchange Commission.
Contact:
Royale Energy, Inc.
Chanda Idano
Director of Marketing & PR
619-383-6600
chanda@royl.com
http://www.royl.com