Royalite Petroleum CO Inc. - Current report filing (8-K)
October 15 2007 - 5:12AM
Edgar (US Regulatory)
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
October 1, 2007
Date of Report (Date of
earliest event reported)
ROYALITE PETROLEUM COMPANY
INC.
(Exact name of registrant as specified in its
charter)
|
NEVADA
|
000-26729
|
88-0427619
|
|
(State or other jurisdiction of
|
(Commission File
|
(IRS Employer Identification No.)
|
|
incorporation)
|
Number)
|
|
|
810 Peace Portal Drive, Suite 201
|
|
|
Blaine, WA
|
98230
|
|
(Address of principal executive offices)
|
(Zip Code)
|
(360) 201-0400
Registrant's telephone number,
including area code
Not Applicable
(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:
______ 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))
|
ITEM 1.01
|
ENTRY INTO A MATERIAL DEFINITIVE
AGREEMENT
|
On October 1, 2007, Royal Petroleum Company Inc. (the
“Company”) entered into a Letter Agreement (the “Letter Agreement”) with Central
Utah Lease Acquisition, L.P., a Utah Limited Partnership (“CULA”), whereby CULA
granted the Company an option to purchase 62.5% of CULA’s interest in an oil and
gas project known as the Keystone Project. The Keystone Project is located in
Sanpete and Juab Counties, Utah and consists of 66,700 net leasehold acres, with
a combined net revenue interest of 80%. If the Company exercises the option, of
which there is no assurance, the Company will have an opportunity to earn
approximately 41,688 net leasehold acres. In consideration for this option, the
Company has agreed to issue to CULA 200,000 shares of common stock. The shares
will be issued pursuant to Rule 506 of Regulation D of the Securities Act of
1933 (the “Securities Act”). CULA has represented to the Company that it is an
“accredited investor” as defined under Rule 501 of Regulation D. In order to
exercise this option, the Company must provide CULA with a written notice of
exercise on or before 5:00 pm Pacific Standard Time on November 21, 2007.
If the Company exercises its option, of which there is no
assurance, the parties will enter into a formal agreement for the purchase of
62.5% of CULA’s interest in the Keystone Project with the following principal
terms and conditions:
|
|
(a)
|
To purchase the interest in the Keystone Project, the
Company will pay and issue the following consideration to CULA:
|
|
|
|
|
|
|
|
|
(i)
|
$1,500,000 in cash on or before November 26, 2007 (the
“Keystone Closing Date”);
|
|
|
|
|
|
|
|
|
(ii)
|
7,300,000 shares of the Company’s common stock on or
before the Keystone Closing Date. The Company will grant CULA piggyback
registration rights in respect of the shares issued. If the Company has
not filed a registration statement to register the shares on or before May
1, 2008, the Company, at its own expense, will file a registration
statement to register the shares;
|
|
|
|
|
|
|
|
|
(iii)
|
$2,260,000 in cash on or before December 31,
2007;
|
|
|
|
|
|
|
|
|
(iv)
|
$2,500,000 in cash on or before June 15, 2008;
|
|
|
|
|
|
|
|
|
(v)
|
$2,500,000 in cash on or before December 15, 2008;
and
|
|
|
|
|
|
|
|
|
(vi)
|
$2,500,000 in cash on or before June 15, 2009.
|
|
|
|
|
|
|
|
(b)
|
The Company will also be required to drill two oil and/or
gas wells within a specified area of the Keystone Project and to carry
CULA as a 25% working interest owner through the completion or plugging of
those wells (the “Carried Wells”). The Company will be required to
commence drilling on the first Carried Well on or before the two year
anniversary of the Keystone Closing Date and on the second Carried Well no
later than the three year anniversary of the Keystone Closing Date. The
Carried Wells must penetrate the top of the Navajo formation or 12,000
feet, whichever is shallower. CULA will assign 62.5% of its interest in
the Carried Wells on the Keystone Closing Date or upon the Company’
request after the Keystone Closing Date. CULA will assign 62.5% of its
interest in the remaining areas of the Keystone Project within five days
notice that the second Carried Well has reached the required depth and is
either completed as a producing well or is plugged and
abandoned.
|
Upon exercise of the option, the Company and CULA will also
enter into an operating agreement to further develop the Keystone Project. Under
the terms of the proposed operating agreement, the Company will be the operator
and CULA will be a non-operator of the Keystone Project. In addition, the
-2-
parties will use their best efforts to finalize the proposed
operating agreement within two weeks of October 1, 2007. A condition of the
proposed operating agreement is that Clayton Williams Energy Inc. (“CWEI”) must
agree to be a party to the operating agreement. CWEI owns an undivided 50%
working interest in an area covering approximately 30,000 gross acres located on
the southern portion of the Keystone Project. In the event that CWEI is
unwilling or unable to enter into the operating agreement on or before the
Keystone Closing Date and both the Company and CULA are prepared to close the
transaction, then the parties agree that the terms of the Letter Agreement shall
be extended until CWEI’s signature has obtained
In order to exercise the option on the Keystone Project, the
Company will be required to obtain substantial financing. The Company does not
currently have any financing arrangements in place and there are no assurances
that the Company will be able to arrange sufficient financing to enable it to
exercise the option on the Keystone Project.
|
ITEM 7.01
|
REGULATION FD DISCLOSURE
|
On October 2, 2007, Royalite Petroleum Company Inc. (the “Company”)
signed an Amended Letter of Intent (the “Letter of Intent”) with Twilight
Resources, LLC (“Twilight”) setting out the proposed terms under which
the Company will acquire an undivided 50% of Twilight’s leasehold interest
in a project known as the Green River Prospect. The Green River Prospect is
located in Grand and Emery Counties, Utah and consists of approximately 6,216
net leasehold acres, with a combined net revenue interest of 80%. The terms
of the Letter of Intent are non-binding and will expire unless a formal agreement
is reach by 5:00 pm Pacific Standard Time on November 20, 2007.
Under the proposed terms for the acquisition, to acquire its
proposed interest in the Green River Prospect, the Company will be required to
do the following:
|
|
(a)
|
pay $6,216,000 in cash to Twilight on or before December
1, 2007 (the “Green River Closing Date”).
|
|
|
|
|
|
|
(b)
|
drill two oil and/or gas wells and carry Twilight as a
50% working interest owner through the completion or plugging of those
wells (the “Carried Wells”). Twilight will assign to the Company a 50%
interest in the Carried Wells upon the Company’s request on or after the
Green River Closing Date. The Company will be required to commence
drilling on the Carried Wells on or before the two year anniversary of the
Green River Closing Date. The Carried Wells must penetrate the top of the
Mississippian formation or 11,000 feet, whichever is shallower. Twilight
will assign a 50% interest in the remaining areas of the Green River
Prospect within 5 days notice that the second Carried Well has reached the
required depth and has either been completed as a producing well or is
plugged and abandoned.
|
|
|
|
|
|
|
(c)
|
enter into an operating agreement with Twilight to
further develop the Green River Prospect. Under the proposed terms of the
operating agreement, the Company will be the operator and Twilight will be
a non-operator of the Green River Prospect. The parties will use their
best efforts to finalize the proposed operating agreement within two weeks
of the date of the formal agreement.
|
Execution of a binding agreement will be subject to the Company
having issued 200,000 shares to Central Utah Lease Acquisition, L.P. (“CULA”)
under the terms of its letter agreement with CULA whereby the Company was
granted an option to an oil and gas project known as the Keystone Project, and
the Company having exercised its option on the Keystone Project.
The above is subject to the conclusion of formal agreements.
There is no assurance that formal agreements will be concluded or that the terms
will not change from those described above.
-3-
|
ITEM 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
|
|
|
|
(d)
|
Exhibits
.
|
-4-
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.
|
|
ROYALITE PETROLEUM COMPANY INC.
|
|
|
|
|
|
Date: October 11, 2007
|
|
|
|
|
By:
|
/s/
Michael L. Cass
|
|
|
|
|
|
|
|
MICHAEL L. CASS
|
|
|
|
Director, Chief Executive Officer and
|
|
|
|
President
|
-5-
Royalite Petroleum (CE) (USOTC:RYPE)
Historical Stock Chart
From May 2024 to Jun 2024
Royalite Petroleum (CE) (USOTC:RYPE)
Historical Stock Chart
From Jun 2023 to Jun 2024
Real-Time news about Royalite Petroleum Company Inc (CE) (OTCMarkets): 0 recent articles
More Royalite Petroleum CO Inc. News Articles