Dejour Energy Inc. (NYSE: DEJ; TO: DEJ) announced Dec. 16 that it has signed a letter of intent to create a strategic joint venture partnership with a private Singapore based energy company to develop the company’s Colorado oil and gas assets.
The private company will invest an initial up to $27.5 million in 2014 and 2015 to earn an 85% share in Dejour’s interests in its Colorado properties, primarily Kokopelli. Following this capital investment, the partners will continue to judiciously develop the reserves on a pro rata basis. Dejour will remain the operator of record.
The private company will assume 85% of the ongoing overhead of Dejour’s U.S. operations and joint project management during the initial period. The private company will also share responsibility to maintain the other Dejour U.S. leases in good standing on a pro rata ownership basis or return them to Dejour in a timely fashion.
“The private company shares Dejour’s value proposition relating to the company’s U.S. E&P portfolio. This partnership will bring many strategic advantages to Dejour: minimizing capital requirement in the short term, bolstering the company’s balance sheet and long term U.S. cash flow, the provision of flexibility for Dejour to pursue new opportunities created in the current E&P landscape plus offer strategic monetizing alternatives currently not available to us,” R.L. Hodgkinson, Dejour CEO, said in the release. “The vitality and breadth of experience present in the private company team is precisely what is required to ensure the operational success and fiscal strength to properly monetize the reserve values imbedded at Kokopelli."
Dejour Energy Inc. is an independent energy company engaged in acquiring, exploring, and developing energy projects with a focus on oil and gas exploration in Canada and the U.S. The company is headquartered in Vancouver, B.C.