In October 2007, Energytec entered into a non-binding letter of intent with an unrelated third party to serve as the basis for selling its interest in the Como oil field (also known as Quitman), and the Redwater pipeline, equipment, and related oil and gas properties. Since the letter of intent was signed, the prospective purchaser conducted its due diligence on the properties and the parties have attempted to negotiate the terms of a transaction. In November 2007, the prospective purchaser advised Energytec it did not intend to pursue any purchase of the Redwater pipeline and related equipment and oil and gas properties in the foreseeable future.
As reported in Energytec’s report on Form 10-Q for the period ended September 30, 2007, Energytec had reached a preliminary understanding to sell the Como field under the non-binding letter of intent to the prospective purchaser for $9,000,000 payable in the form of cash and a promissory note, subject to a number of conditions and further agreement of the parties on certain terms. Energytec would not accept the prospective purchasers offer regarding the portion of the purchase price to be paid in cash and the portion to be paid through a promissory note, as well as other matters necessary to agree and complete the proposed transaction, such as, the form and substance of the promissory note.
Energytec has terminated any further negotiations with the prospective purchaser regarding sale of the Como field. Energytec does not have any agreement or understanding with any person for sale of the Como field at this time.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Date: January 4, 2008 | By: | /s/ Dorothea Krempein | |
| | Dorothea Krempein | |
| | Vice President and Chief Financial Officer | |
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