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THE EXPLORATION COMPANY ANNOUNCES TERMINATION OF ITS AGREEMENT WITH GLOBAL ENVIRONMENTAL INDUSTRIES & NEW AGREEMENT WITH ENSERCH EXPLORATION

THE EXPLORATION COMPANY ANNOUNCES TERMINATION OF ITS AGREEMENT WITH GLOBAL ENVIRONMENTAL INDUSTRIES & NEW AGREEMENT WITH ENSERCH EXPLORATION
 SAN ANTONIO, Texas, Sept. 14 /PRNewswire/ -- The Exploration Company (TXCO) (NASDAQ) announced today that it has terminated the assets for stock exchange agreement (agreement) between Global Environmental Industries, Inc. (GEI) of Austin, Texas, and TXCO dated Aug. 7, 1991 effective Sept. 11, 1992. TXCO has instructed its counsel to withdraw the Form S-4 Registration Statement filed with the Securities and Exchange Commission on April 15, 1992 which has not yet become effective.
 TXCO entered into the agreement based upon statements provided to TXCO by GEI's officers, directors and agents which TXCO now believes were inaccurate and/or incomplete; consequently, TXCO does not feel that it can rely upon the accuracy of the information supplied by GEI's management.
 GEI failed to disclose to TXCO that C.J. Douglas, GEI's president and a director of the company, has a $1,300,000 civil judgment against him for willful, negligent and fraudulent activities while in a fiduciary position. In addition, Douglas has been named as a defendant in another civil suit in which Douglas is charged with fraudulent activity. GEI also failed to disclose to TXCO that Virgil A. Robbins, formerly CEO of GEI and currently a consultant actively involved in the daily operations of GEI, was sentenced to two years in the federal correctional facilities for fraudulent activities (such sentence was later adjusted to five years supervised probation).
 The SEC has not issued an effective date for the S-4 as was contemplated under the agreement and GEI failed or refused to respond to numerous objections to disclosures made by TXCO during TXCO's investigation of GEI. These objections included the failure of the board of directors to explain the disclosure that GEI sold shares of its common stock to Douglas, president and director of GEI, at $1.14 per share one week after shares had been valued by the board of directors in another sale to be $2.00 per share.
 GEI's board of directors has refused to consider TXCO's requests that certain officers and directors of GEI resign and that methods be implemented to insure that Robbins and Douglas are no longer associated with GEI as conditions to continuing the actions contemplated in the agreement. As TXCO does not feel that its shareholders interests can best be served by continued associations with Douglas and Robbins, TXCO has elected to terminate the agreement.
 TXCO is pleased to announce that it has signed an agreement with EP Operating (EPO), the operating entity of Enserch Exploration, Inc., wherein EPO has agreed to the drilling of a well to test the Glenrose formation under 40,000 acres which TXCO has under lease in Maverick County, Texas. Should the well, the Barclay No. 1-138 which is being drilled at this time, be productive, EPO has the option to join TXCO in a seismic exploration program having a minimum expenditure of $200,000. EPO then has the option to purchase an undivided 50 percent interest in the entire 40,000 acres. Prime Operating, a subsidiary of Prime Energy, is shooting two additional seismic lines prior to beginning actual drilling of a horizontal Glenrose well on a separate 10,000 acres block in Maverick County, Texas. Under TXCO's agreement with Prime, Prime has the option to purchase a 50 percent interest in approximately 2,500 additional acres after the well is completed.
 -0- 9/14/92
 /CONTACT: James E. Sigmon, president of The Exploration Company, 512-496-5300/
 (TXCO GLEN) CO: The Exploration Company; Global Environmental Industries, Inc.;
 Enserch Exploration, Inc. ST: Texas IN: OIL SU:


PS-OS -- NY070 -- 9279 09/14/92 16:11 EDT
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Publication:PR Newswire
Date:Sep 14, 1992
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