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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 (Date of earliest event reported): October 2, 2017
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Viking Energy Group, Inc. |
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(Exact name of registrant as specified in its charter) |
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Nevada |
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000-29219 |
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98-0199508 |
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(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification Number) |
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1330 Avenue of the Americas, Suite 23 A, New York, NY |
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10019 |
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(Address of principal executive offices) |
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(zip code) |
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(212) 653-0946 |
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(Registrant’s telephone number, including area code) |
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_____________________________________________ |
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(former name or former address, if changed since last report) |
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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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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 o
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. o
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ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION.
Viking Energy Group, Inc. (the “Company” or “Viking”) executed a Promissory Note, dated October 2, 2017 (the “Note”), through a wholly-owned subsidiary, Mid-Con Drilling, LLC (“Mid-Con”), in favor of Cornerstone Bank (“Cornerstone”). The principal amount of the Note, which loan transaction formally closed on October 2, 2017, is $290,000, and the maturity date of the Note is October 2, 2025. For the first 12 months, the Note bears interest at Cornerstone’s corporate base rate (currently 4.5%) plus 1.0%, and thereafter the interest rate shall be 6% per annum. $286,016 of the loan proceeds were used to purchase the assets described in Item 8.01 below. The Note is secured by a first-ranking security interest and mortgage against the assets acquired by the Company described below, and a guaranty from each of the Company and the Company’s President and Chief Executive Officer, James Doris.
ITEM 8.01 OTHER EVENTS.
On October 2, 2017, the Company, through Mid-Con, closed on the acquisition, effective October 1, 2017, of a 100% working interest in six new oil and gas leases in Miami and Franklin Counties in Eastern Kansas. Existing production from the acquired interests is approximately twenty-two barrels of oil per day. The purchase includes an undivided interest in all oil and gas wells, equipment, fixtures and other personal property located upon the leased properties and used in connection with oil and gas operations upon the leases attributable to the working interests purchased by Viking, through Mid-Con. The leases produce oil from the Cherokee formation and offer the potential for several future drilling locations. The acquisition price for this transaction was $530,000. A portion of the purchase price was obtained from the loan transaction described in Item 2.03 above, and the balance was provided by the Company from cash on-hand via a recently completed private placement. S&B Operating, LLC, the Company’s existing operator in Kansas, will operate these assets on behalf of the Company.
The foregoing description of the terms of the acquisition is qualified in its entirety by the full text of the acquisition purchase agreement filed as Exhibit 10.1 to, and incorporated by reference in, this report.
This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, made in this report are forward-looking and subject to change. Examples of forward-looking statements include statements related to anticipated oil production and the number of potential drilling locations resulting from the acquisition. These forward-looking statements are subject to business and economic risk, reflect management’s current expectations, and involve subjects that are inherently uncertain and difficult to predict. Our actual results could differ materially from expected results expressed in forward-looking statements. We will not necessarily update information if any forward-looking statement later turns out to be inaccurate.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The exhibit listed in the following Exhibit Index is filed as part of this report:
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Exhibit No. |
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Description |
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SIGNATURES
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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Viking Energy Group, Inc. |
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Dated: October 3, 2017 |
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/s/ James Doris |
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James Doris |
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CEO & Director |
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EXHIBIT 10.1
AGREEMENT
This Agreement is made and entered on the 15 day of September, 2017, by and between Altavista Energy, Inc., a Kansas corporation ("Seller"), and Mid-Con Drilling, LLC, a Kansas Limited Liability Company ("Buyer"), governed by the laws of the State of Kansas.
In consideration of the mutual covenants and Agreements contained herein, the sufficiency and adequacy of which are mutually acknowledged, the Parties agree as follows:
1. SALE OF PROPERTY . Seller is the owner of 100% of the Working Interest in and to the oil and gas leases described in Exhibit A attached hereto (the "Leases"). Seller agrees to sell its working interest in the Leases in current condition together with all of its right, title and interest in and to all rights, privileges and easements appurtenant thereto, free and clear of all liens and encumbrances, to Buyer for the total sum of Five Hundred and Thirty Thousand Dollars ($530,000.00), including all personal property now in place on the Leases. The purchase price shall be paid as follows:
Five Hundred and Thirty Thousand Dollars ($530,000.00) at Closing to be paid in collected funds.
Seller has full power and lawful authority to bargain, grant, sell, mortgage, assign, transfer, convey and grant 100% of the Working Interest in the Leases in the manner and form provided, without obtaining the waiver, consent or approval of any lessor, sublessor, governmental agency or entity or party whomever or whatever.
2. ASSIGNMENT FORMS. Seller shall at Closing assign to Buyer in "as is" condition, free and clear of all liens and encumbrances, all its Working Interest in the Leases. All assignments will have an effective date of October 1, 2017.
3. CLOSING . Closing shall be on or before Monday, October 2, 2017, at a time and location mutually agreeable to Buyer and Seller. Buyer shall deliver to Seller the full payment of Five Hundred and Thirty Thousand Dollars ($530,000.00) at Closing to be paid in collected funds.
4. POSSESSION . Time is of the essence. Upon full payment due on Closing, Buyer shall be entitled to possession of the Leases and the personal property described in the Assignment forms on the date of Closing and not before. Failure to close on or before October 2, 2017, shall render this sale null and void.
5. DEFAULT . This is an absolute sale and the Parties acknowledge they will change their respective positions at the signing of this Agreement and each commit to the performance of acts required of them by the terms of this Agreement. The Parties agree that it is not possible to quantify the losses which may accrue to the Seller or Buyer should either not perform this Agreement, and thus should either party default on this Agreement the Agreement becomes null and void and both Parties will have no further obligation to one another.
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6. SELLER RETENTION. Seller shall continue to operate and produce all of the leases until the date of Closing. Seller shall retain all production from said operations during such executory period and shall pay and be responsible for all expenses and liabilities to the effective date of the Assignment forms. Seller intends to sell all production on or before September 30, 2017. All continuing services such as utilities, pumper fees and related expenses shall become on the date of Closing Buyer's liability.
7. TIME IS OF THE ESSENCE . It is very important to Seller that this sale is performed in a prudent and timely manner. Time is of the essence. Thus, all things which are required to be done by certain dates must be done; otherwise, such failure shall be deemed a material default.
8. CONSENT OF SELLER . Although Buyer shall not take possession until Closing, Buyer shall be permitted to come upon the Leases to make such inspections of the properties as it may reasonably desire. Nothing shall be removed from any of the Leases while making such inspections and respect must be paid to the landowner rights where the Leases are located.
9. JOINT DRAFTING . The Parties shall be considered joint drafters of this Agreement so as not to construe this contract against one Party as drafter more than the other.
10. COUNTERPARTS . This Agreement may be signed in two or more counterparts.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and inure to the benefit of, the Parties hereto and their respective successors, heirs, administrators and assigns. Either Buyer or Seller may assign all or any portion of their rights hereunder to a third party.
In Witness Whereof, the Parties have entered into this Agreement as of the date opposite the signatures below to be effective on the date last signed.
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| 9/18/2017 | By: | /s/ Douglas G. Evans | |
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Douglas G. Evans | |
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MID-CON DRILLING, LLC – BUYER |
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September 15th, 2017 |
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/s/ James A. Doris |
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James A. Doris |
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President of Sole Member, |
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Viking Energy Group, Inc. |
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ACKNOWLEDGMENTS
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STATE OF KANSAS |
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ACKNOWLEDGMENT FOR CORPORATION |
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COUNTY OF FRANKLIN |
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Be it Remembered that on this _____ day of September, 2017, before me, the undersigned, a Notary Public, duly commissioned, in and for the county and state aforesaid, came Douglas G. Evans, President of Altavista Energy, Inc., a corporation of the State of Kansas, personally known to me to be such officer, and to be the same person who executed as such officer the foregoing instrument of writing on behalf of said corporation, and he duly acknowledged the execution of the same for himself and for said corporation for the uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on the day and year last above written.
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Notary Public
Appointment/Commission Expires:
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STATE OF _________ |
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ACKNOWLEDGMENT FOR LLC |
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COUNTY OF _______ |
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Be it Remembered that on this _____ day of September, 2017, before me, the undersigned, a Notary Public, duly commissioned, in and for the county and state aforesaid, came James A. Doris, Member of Mid-Con Drilling, LLC, personally known to me to be such Member, and to be the same person who executed as such Member the foregoing instrument of writing on behalf of said limited liability company, and he duly acknowledged the execution of the same for himself and for said limited liability company for the uses and purposes therein set forth.
In Witness Whereof, I have hereunto set my hand and official seal on the day and year last above written.
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Notary Public
Appointment/Commission Expires:
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EXHIBIT A
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BARKIS LEASE |
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Dated: |
April 28, 1983 |
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Filed: |
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Recorded: |
Book 342, Page 380 |
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Lessor: |
Lloyd Barkis and Helen Barkis |
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Lessee: |
Lloyd Barkis and Somerset Energy, Inc. |
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Legal Description: |
The Northwest Quarter of Section 17, Township 16 South, Range 24 East, Miami County, Kansas |
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NEVIUS LEASE |
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Dated: |
September 28, 1978 |
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Filed: |
October 18, 1978 |
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Recorded: |
Book 267, Page 566 |
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Lessor: |
Walter E. Nevius and Myrtle F. Nevius, husband and wife |
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Lessee: |
Somerset Energy, Inc. and Somerset Associates, a limited partnership |
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Legal Description: |
The West Half of the Northeast Quarter (W/2 NE/4) of Section 17, Township 16, Range 24, 80 acres; AND Beginning at a point 1287.7 feet South of the Northeast corner of said Northeast Quarter (NE/4) of Section 17, said point being on the East line of said Section 17; thence South along the East line of said Section 17, a distance of 330 feet; thence West, parallel to the North line of said Section 17, a distance of 792 feet; thence North parallel to the East line of said Section 17, a distance of 330 feet; thence East parallel to the North line of said Section 17, a distance of 792 feet to the place of beginning, enclosing 6 acres, more or less, in Township 16 South, Range 24 East, Miami County, Kansas; AND Beginning at the Northeast corner of Section 17, Township 16 South, Range 24 East, Miami County, Kansas, thence South along the East line of said Section 17, a distance of 1287.7 feet; thence West parallel to the North section line of said Section 17, a distance of 792 feet; thence North parallel to the East line of said Section 17, a distance of 1287.7 feet to the North line of said Section 17; thence East along the North line of said Section 17, a distance of 792 feet to the place of beginning; enclosing 23.4 acres, more or less; AND the East Half of Southeast Quarter of Section 17, Township 16, Range 24, 80 acres, all in Miami County, Kansas. (Legal Description cited is from a title opinion dated April 22, 2015.) |
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STAHL LEASE |
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Dated: |
March 22, 1983 |
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Filed: |
September 8, 1983 |
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Recorded: |
Book 302 of Misc., Page 57 |
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Lessor: |
Bernard J. Stahl, a single man |
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Lessee: |
Town Oil Company |
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Legal Description: |
West Half of the Southwest Quarter of Section 17, Township 16 South, Range 24 East, Miami County, Kansas |
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