The company, under the terms of the agreement, will pay $450,000 for 77% net revenue interest in the potential production from the four parcels, 2,026 acre property which collectively is called the "Smackover Lease."
The company has prepared a report which suggests that the Smackover Lease lies on strike with other companies producing oil in the area, both along the same fault.
AGR CEO Vern Wilson said in conjunction with the lease owners the company has performed significant amounts of due diligence on the Smackover lease over the past several years.
"I have surveyed the first drilling site and have visited the other drill sites — I am very familiar with the property as well as the local geology," Wilson added.
"Assuming we utilize our non-dilutive financing agreement with Qeteras, or a similar instrument, the company may not need to issue any stock to acquire or develop this property, a strategy we seek to use."
The Smackover lease may contain significant oil and gas reserves which may yield up to two million barrels of oil and 38 billion cubic feet of natural gas.
The acreage may also create the potential for a seven to eight well drilling program for a capital budget of about $15.4m.
The transaction is subject to regulatory and other necessary contingent approvals.
