Item 1.01 Entry into a Material Definitive Agreement.
On March 29, 2021, Evolution Petroleum Corporation (the “Company”) entered into a Purchase and Sale Agreement ("PSA") with TG Barnett Resources, LP ("TGBR"), a wholly owned subsidiary of Tokyo Gas Americas, Ltd. Pursuant to the PSA, the Company will acquire from TGBR a non-operating working interest in certain of its Barnett Shale properties for a purchase price of approximately $23.25 million in cash (the "Purchase Price"). Contemporaneous with the execution of the PSA, the Company paid TGBR a deposit of $2.325 million. The Company expects to fund the balance of the Purchase Price with a combination of borrowing under its senior secured credit facility and cash on hand.
The effective date of the acquisition is January 1, 2021 and the transaction is expected to close on April 30, 2021. The transaction is subject to customary closing conditions. The PSA contains customary representations and warranties, covenants, indemnification, and termination provisions and also provides for various purchase price adjustments to be calculated as of the closing date.
The foregoing description of the PSA and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the PSA, which will be filed as an exhibit to the Company's Current Report on Form 8-K that will be filed in connection with the consummation of the transaction.
There is no assurance that the Company will complete this acquisition on the terms contemplated in this Current Report on Form 8-K or at all.
Cautionary Statement
This Current Report on Form 8-K contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends affecting the financial condition of its business. These forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond its control, including the completion of the proposed transaction on the terms or timeline currently contemplated or at all. Please read the Company’s filings with the Securities and Exchange Commission, including “Risk Factors” in its Annual Report on Form 10-K for the year ended June 30, 2020, for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “expect,” “indicate” and similar expressions are intended to identify forward-looking statements. All statements other than statements of current or historical fact contained in this Current Report on Form 8-K are forward-looking statements. Although the Company believes that the forward-looking statements contained in this Current Report on Form 8-K are based upon reasonable assumptions, the forward-looking events and circumstances discussed in this press release may not occur and actual results could differ materially from those anticipated or implied in the forward-looking statements.