Texas Energy Holdings Begins 2006 with a $20.5 Million Commitment in the Barnett Shale and East Texas Cotton Valley Field.

DALLAS -- Energy investment firm focuses $8 million in horizontal drilling in the Barnett Shale and more than $12 million in the Cotton Valley Field

Texas Energy Holdings, a privately held energy investment firm concentrating in active development of oil and gas fields, has announced it is committing more than $8 million toward drilling of up to 20 horizontal wells in the Barnett Shale and $12.5 million for the purchase of working interest in wells to be drilled in the East Texas Cotton Valley Field. The Barnett Shale is the largest gas producing field in Texas and one of the three largest in the United States, with production expected to exceed 400 billion cubic feet this year.

Texas Energy Holdings' primary focus is non-operated interest in which the company owns between 20 to 30 percent of wells with several dozen operators. Texas Energy Holdings has managed working interests in some 500 wells and 200 leases in Texas, Louisiana, Oklahoma, Indiana and Illinois, with primary focus on developmental drilling in the blanketed formations in the North Texas Barnett Shale and East Texas Cotton Valley Field. Last month, Texas Energy Holdings acquired working interest ownership in up to 1,500 acres of developmental acreage within Johnson County which will begin development in February 2006.

"We exceeded our revenue targets by 30 percent in 2005, this abundance of capital makes Texas Energy Holdings a strong entity in the marketplace; in Texas alone we have holdings in more than 30 wells drilled and 4,000 acres of development leases located within Tarrant, Denton, Parker and Johnson Counties," said Chad Willis, president of Texas Energy Holdings. "In 2006 we expect to test wells in Erath County and Palo Pinto County; these counties, known as 'the outer area' of the Barnett Shale, are believed to be the next most active areas in the Barnett Shale. Texas Energy Holdings is now in 6 major areas in 5 states; this exceptional growth further diversifies our investment models."

In addition to funds committed to the Barnett Shale, Texas Energy Holdings has also committed up to $12.5 million for the purchase of working interest in wells to be drilled in the East Texas Cotton Valley Field. Texas Energy Holdings will purchase between 10 to 25 percent interest in as many as 30 to 50 Cotton Valley wells to be drilled over the next 11 months. To date, Texas Energy Holdings has holdings in 15 wells drilled in the Cotton Valley-producing counties of Panola County, Gregg County and Rusk County.

About Texas Energy Holdings

Texas Energy Holdings is a privately held energy investment firm managing more than $20 million in assets and concentrating in active development of oil and gas fields. Texas Energy Holdings manages national and international institutional and individual clients with emphasis on structuring investment vehicles that enable the average investor to develop an oil and gas portfolio alongside the largest privately owned and publicly traded oil and gas companies. Texas Energy Holdings has managed working interests in some 500 wells and 200 leases in Texas, Louisiana, Oklahoma, Indiana and Illinois, with primary focus on developmental drilling in the blanketed formations in the North Texas Barnett Shale and East Texas Cotton Valley Field. For more information please visit: www.tx-energy.com