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"Boost growth and shareholder value to the next level"
Press Release Source: Pilgrim Petroleum Corporation
Pilgrim Petroleum Announces: Strategic Fit with General Energy Leads to Attractive Competitive Advantage
Wednesday February 28, 2:30 am ET
IRVING, Texas--(BUSINESS WIRE)--Pilgrim Petroleum Corporation (PINK SHEETS: PGPM - News; FWB: PHV) is pleased to announce the benefits of the strategic fit relationship with General Energy Corporation. The recently signed Letter of Intent to purchase 80% of Pilgrim's working interest's highlights opportunities for cost sharing, skill transfer and enhanced corporate performance. General Energy, a Texas Railroad Commission fully-bonded operator, has been working and supporting Pilgrim Petroleum to comply with RRC's regulations and to re-establish oil production on inactive leases. Since 2006, both companies have been building a great and successful business relationship. General Energy's intent to purchase Pilgrim's working interest in its North Texas positions will contribute by opening up new acquisitions objectives, exposure to private equity and by begining the first phase of an exploration and drilling program among other things.
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Financial Highlight
Based on the total price of the transaction, $41,640,000. At the end of the transaction, Pilgrim will record a gain on sales of $35,230,800 in retained earnings after deductions on asset investments and deferred income taxes. Likewise, Pilgrim will maintain its "free of Debt" condition, while sharing the costs and risks of its exploration program.
Operational Level Highlight
General Energy's access to high quality rigs and low cost technical resource expertise will contribute by maximizing savings and boosting the expected timing of drilling and completion in Pilgrim's lease positions. The first phase of the North Texas Drilling Program is expected to access over $102,370,000 in probable reserves and over 1.8 million barrels of oil potentially recoverable and economic. Mapping and 3D seismic surveys on Pilgrim's two largest positions are expected to commence by the end of March 2007.
Pilgrim's Chief Executive, Rafael Pinedo, commented, "The year 2006 was an excellent year for Pilgrim in terms of production levels by reactivating its shut-in wells and building up acreage acquisitions. This year, General Energy and Pilgrim`s combined resources will boost growth and shareholder value to the next level."
About Pilgrim Petroleum Corporation.
Pilgrim Petroleum Corporation (PINK SHEETS: PGPM - News; FWB:PHV) is an independent oil and gas company based in Irving, Texas. The company is acquiring oil and gas leases, producing properties, mineral rights, and surface interests primarily on marginal fields. Once acquired, the company intends to redevelop each property in order to maximize the income from each property by refurbishing and improving the existing production. Forward-Looking Statements: The statements which are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including but not limited to, the effect of economic conditions, the impact of competition, the results of financing efforts, changes in consumers' preferences and trends. The words "estimate," "possible," and "seeking" and similar expressions identify forward-looking statements, which speak only to the date the statement was made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, because of new information, future events, or otherwise. Future events and actual results may differ materially from those set forth herein, contemplated by, or underlying the forward-looking statements.The information herein is subject to change without notice. Pilgrim Petroleum Corporation shall not be liable for technical or editorial errors or omissions contained herein.
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