By Alex Kowalski
PBN Staff Writer
WARWICK – Sungro Minerals Inc. has acquired a 28 percent interest in “proven reserves” of oil and gas valued at more than $8 million in the Grand Chenier Gas Field from Sigma Gamma Interests LLC for $2 million, the company announced Thursday.
As a result of the deal, company executives expect to achieve profitability and see positive cash flow by March 1 of its second quarter, Sungro’s Chief Financial Officer Erwin Vahlsing Jr. said in prepared remarks. The company also expects to acquire sole management of production within the next few weeks, and as the Operator of Record, will handle resource extraction and financial relations with shared interests in the gas field.
As Operator of Record, Sungro will handle extraction, while sharing the revenue produced in the process. “We operate the entire field on behalf of all the interest holders, and we get some percentage [return] for that work. And the rest of the revenue and costs are shared among [our] investors,” Vahlsing told the Providence Business News.
The Grand Chenier Gas Field - located in Cameron Parish, La. - holds a value in excess of $100 million, according to an appraisal by international petroleum consultants Netherland, Sewell & Associates Inc., with definitive in-ground resources expected to wield more than eight percent of the property’s total value.
Sungro, a Warwick-based diversified mining company with exploration interests in oil, gas, gold and iron incorporated in Nevada, is in the process of transitioning its offices to Johnston, Vahlsing told the Providence Business News. The company, which was was incorporated in August 2007, went public in early 2009 and moved to Warwick later that year.
Vahlsing, who said that Sungro had “no real revenue” prior to the acquisition, expects a turnaround once production on the Nunez 1 well begins.