Oil & Gas News: Eternal Energy Closes Sale To Ryland Oil

May 3, 2010 (FinancialWire) — Eternal Energy Corp. (OTCBB: EERG) said it has closed an asset purchase and sale and royalty purchase transactions with Ryland Oil Corp. (TSX Venture: RYD).

Under the terms of the deal, Colorado-based Eternal sold its ten percent working interest in roughly 700 net acres located in northern North Dakota to Canada-based Ryland's U.S.-based, wholly-owned subsidiary, Rover Resources, Inc., for $1 million in cash.  

The payment was received by Eternal at closing, according to the company. Eternal also sold its 5% gross overriding royalty interest in roughly 264,000 net acres located in southeastern Saskatchewan to Ryland for $2.9 million in cash, due on or before June 1, 2010, 2,145,883 shares of Ryland stock valued at around CDN$880,000 as of the closing date.

Eternal said the deal includes an assignment by Ryland of its 100% working interest in around 4,480 acres located in southeastern Saskatchewan to Eternal.

Eternal said that the Hardy Prospect is valued at around CDN$240,000.

The Ryland shares received are restricted from trading in Canada until August 30, 2010, and will be freely tradable in Canada thereafter, according to Eternal.

The Ryland Shares will not be registered for resale in the United States and, consequently, will be subject to standard resale restrictions in the United States.

Upon closing, 60% of the gross overriding royalty interest sold to Ryland was placed in escrow pending Eternal's receipt of the $2.9 million payment. If the payment is not received by June 1, 2010, the escrowed gross overriding royalty interest will revert to Eternal.  

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