Royale Energy Inc. (NASDAQ: ROYL) has entered into an agreement to sell a portion of its Alaska acreage for cash and a retained interest. Royale will receive $2 million in cash and retain an overriding royalty Interest in exchange for a 100% working interest in its Western Block consisting of approximately 39,500 acres. The sale is subject to approval by the state of Alaska.
In December 2011, Royale acquired 96,000 acres of leasehold acreage on the Alaskan North Slope. Over the following four years, the company acquired and processed 3D seismic data, further positioning the acreage for development. Following the transaction, Royale will retain 57,000 acres for which it is evaluating alternatives including similar de-risking, sale, or joint venture.
Royale considers this sale a key step in its plan to strengthen its balance sheet and regain compliance with NASDAQ listing requirements. A portion of the sale proceeds will be used to fund Royale’s upcoming drilling campaign scheduled to begin in December.