Cotton Valley to Acquire $7 Million of West Texas Oil Properties.DALLAS--(BUSINESS WIRE)--July 14, 1998--Cotton Valley Resources Corporation (AMEX AMEX See: American Stock Exchange :KTN Ktn Kaernten (German: Carinthia; Austria Europe) KTN Knowledge Transfer Network KTN Kenya Television Network KTN Kawish Television Network (Pakistan) )(CDN (Content Delivery Network) A system of distributed content on a large intranet or the public Internet in which copies of content are replicated and cached throughout the network. :CVZC.) announced today that it has entered into an agreement to acquire a Permian Basin The Permian Basin is a sedimentary basin largely contained in the western part of the U.S. state of Texas. It reaches from just south of Lubbock, Texas, to just south of Midland & Odessa, extending westward into the southeastern part of the adjacent state of New Mexico. private oil and gas company currently operating 180 oil and gas wells in four counties of West Texas and certain other unrelated properties for a total cash price of $7 million. Using reports prepared by outside petroleum engineers and prices of $13.50/bbl. for 1998 and $15.50/bbl. for 1999, the Company estimates that the effect on the 11 months remaining in fiscal 1999, starting in August, 1998, will be sales of $3.8 million, income from operations of $2.7 million and net income after interest, depletion and depreciation of $1.0 million. If oil prices average $18.00/bbl. over the next fifteen years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time properties are expected to generate, during that period, $36.5 million of revenue and $22.6 million of net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . The properties are currently producing 450 barrels of oil per day which is expected to increase to a one-year average of 880 barrels of oil per day (and 525 Mcf of gas per day) as a $2.5 million infill drilling and reworking program is implemented. The independent engineers have estimated the property to contain net proved reserves proved reserves The quantity of minerals expected to be recoverable under current economic and operating conditions. The amount of proved reserves is important in valuing the stock of a company with significant holdings in natural resources. of 2.4 million barrels of oil and 1.5 billion cubic feet of gas. Of these reserves, approximately 53% is proved producing, 17% is production behind pipe and 30% is proved undeveloped. Cotton Valley engineers have further estimated that an additional 2 million barrels of oil and 2 billion cubic feet of gas will become classified proved within the next 12 months as the planned redevelopment program is implemented. The property contains almost 7,000 acres of producing leases in the San Andres formation which are prospective candidates for a waterflood project and according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Cotton Valley engineers could contain probable reserves of more than 4 million barrels of oil based upon a percentage of ultimate primary recovery. "This acquisition is scheduled to close in early August," said Gene Soltero, Chairman of the Board and Chief Executive Officer. In other property acquisition moves, Cotton Valley also announced that it elected not to exercise the option it held with Phillips Petroleum Company Phillips Petroleum Company was founded in 1917 by L.E. Phillips and Frank Phillips, of Bartlesville, Oklahoma. Their younger brother, Waite Phillips was the benefactor of Philmont Scout Ranch. Phillips Petroleum was headquartered in Bartlesville, Oklahoma. to acquire Phillips interest in the East Binger binge n. 1. A drunken spree or revel. 2. a. A period of unrestrained, immoderate self-indulgence. b. Field due to a reduction in value as a result of lower oil prices. Cotton Valley further announced it has entered into an option expiring in September 1998 to purchase $1.5 million of producing and undeveloped oil properties in the North Yellow Creek Yellow Creek may refer to: In Illinois:
The information in this news release includes certain forward looking statements that are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties, including statements to the future financial performance of the Company. Although the Company believes that the expectations reflected in its forward looking statements are reasonable, it can give no assurance that the expectations of any of its forward looking statements will prove to be correct. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development and acceptance, the impact of competitive services and pricing, general economic risks and uncertainties. Cotton Valley Resources Corporation acquires and develops oil and gas properties using new technologies and its own service companies. There are approximately 17 million common shares outstanding.
CONTACT: Salzwedel Financial Communications Inc.
Jeff Salzwedel, 503/638-7777
or
Cotton Valley Resources Corporation
Patty Dickerson, 214/221-6500
E-mail: patty@cottonvalley.com
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