AUSTIN, TX, December 16, 2009
United States Oil and Gas Corp Finalizes Agreement to Acquire 100% of North Dakota Services Company
United States Oil and Gas Corp (Pink Sheets: USOG), a growing oil and gas products, services and technology company, is pleased to announce that it has now finalized terms of its acquisition of United Oil ("United"), a North Dakota-based distributor of refined fuels and other oil-based products.
The transaction is expected to close January 1, 2010, for immediate effect. Under the terms of the agreement, which is subject to a number of conditions including the receipt by both parties of certain consents and releases, United will be a wholly owned operating subsidiary of USOG.
Revenue at United is expected to total $8 million for the year ending December 31, 2009, with steady growth moving forward. Revenue for 2008 totaled $7 million, to-date the company's best on record.
Year to date, United has signed 150 new propane customers, 70 of which were added in the fourth quarter. As the price of propane has risen in recent months, United has also benefited from the summer purchase of forward hedges on propane. Now at around $1.35 per gallon in N. Dakota, propane prices have risen over 60% since the start of the quarter. More details of United's solid financial position will be updated after the quarter ends.
As previously reported, USOG's purchase of United includes all property, equipment and six acres of developable land. Besides United Oil and Gas, Inc., United Propane, United C-Store and an additional gas station and C-store that will soon be operational are part of the acquisition.
Management, which has over 30 years experience in the industry, is contracted to remain with the business for a minimum of three years. The company was started in 2003, and includes a bulk storage plant, and a fleet of tanker trucks.
Located in the northern central portion of North Dakota, United is a profitable oil and gas distribution company which sells diesel, race gasoline, propane, and lubricants to over 400 customers including regional businesses, farms, and private residences. The company offers personal customer service and premium pricing; comparative advantages that have helped attract new customers and increase market share.
About United States Oil & Gas Corp.
United States Oil and Gas Corp is focused on acquiring and growing domestic oil and gas services companies. The Company targets small to mid size family-run businesses with historically profitable results, strong balance sheets, high profit margins, and solid management teams in place. The Company made its first acquisition, Turnbull Oil, in May 2009.
The Company has tried to identify any forward-looking statements contained in this press release using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect the Company's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. The Company undertakes no obligation to update or provide advice in the event of any change, addition or alteration to the information catered in this press release including such forward-looking statements.
