American Noble Gas Acquires Interests in Oil and Gas Leases in Southern Kansas Near the Oklahoma Border

Acquisition Includes Approximately 130 Oil and Gas Wells Currently Producing Approximately 100 Barrels of Oil and 1.5 Million Cubic Feet of Natural Gas Per Day

Lenexa, KS, May 19, 2022 (GLOBE NEWSWIRE) -- American Noble Gas Inc. (OTC-QB: IFNY) (“AMGAS” or the “Company”) is pleased to announce that it has acquired a 60.7143% in GMDOC, LLC, a Kansas limited liability company (“GMDOC”), which has previously acquired working interests in certain oil and gas leases (the “GMDOC Leases”) from Castelli Energy, L.L.C, an Oklahoma limited liability company (“Castelli”). The GMDOC Leases cover approximately 10,000 acres located in Southern Kansas near the Oklahoma border. The GMDOC Leases currently produce approximately 100 barrels of oil per day and 1.5 million cubic feet of natural gas per day on a gross basis.

On May 3, 2022, AMGAS entered into the operating agreement of GMDOC (the “Operating Agreement”), pursuant to which the Company acquired 17 (or 60.7143%) of 28 limited liability membership interests (the “Interests”) in GMDOC, for an aggregate purchase price of $4,037,500, and was subsequently admitted as a member of GMDOC.

GMDOC had acquired 70% of the working interests in the GMDOC Leases from Castelli. GMDOC is managed by two other members – Darrah Oil Company, LLC, a Kansas limited liability company, and Grand Mesa Operating Company, a Kansas corporation (the “Managing Members”) – each of which also serve as the operating companies under the GMDOC Leases.

Pursuant to the terms of the Operating Agreement, each member agreed to pay GMDOC, as its capital contribution, $50,000 in cash per Interest, with the remainder to be financed by a loan to GMDOC from a bank, secured by GMDOC’s oil & gas lease properties, in the aggregate amount of $6,045,000. The principal of the bank loan is to be repaid in 84 varying monthly installments starting July 1, 2022, ranging from $170,000 at the beginning to $40,500 at the end of the loan term. The bank loan bears a variable interest beginning with an initial rate of 6% per annum with one rate adjustment after 36 months subject to a 6% minimum interest rate. Initial working capital was financed, in part, by a loan to GMDOC from a Managing Member, in the maximum aggregate amount of $400,000, which is to be repaid over 12 months and bears interest at a rate of 6% per annum.