BDGR: AUSTIN, Texas--(BUSINESS WIRE)--June 1, 2006--Black Dragon Resource Companies, Inc. (OTCPK: BDGR) announced today that it has entered into an agreement to purchase all of the issued and outstanding shares of stock of Gemini Explorations, Inc ("Gemini") a privately held Louisiana corporation and additional assets held personally by the owners of Gemini, who are Eugene DuCharme and James Vozzella. Both Messr. DuCharme and Vozzella will join Black Dragon upon the closing of the transaction and will enter into long-term management agreements with Black Dragon. The Gemini team will provide in house expertise in the areas of property management, maintenance, drilling etc. Total purchase price for Gemini and the non-Gemini assets is $25 million, payable in cash and stock. The existing $2.3M note held by Gemini for its prior sale to Black Dragon of shallow rights at Caddo Lake will be extinguished at the closing. The closing of the transaction is subject to final due diligence and other conditions of closing.
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Gemini, which specializes in the development and management of mature oil and gas properties, has been actively engaged in oil and gas exploration, production and operations in Northwest Louisiana for over thirty years. The purchase will bring Black Dragon not only valuable assets in its major area of operations but also expertise, management and equipment that significantly increase its ability to continue its growth and productivity.
The primary oil and gas mineral assets included in the transaction are:
1) The Hollenshead O&G, LLC properties acquired by Gemini in 2005. These properties cover 4700 acres of land with 525 previously drilled wells. Approximately 250 of those wells are currently in production. Gemini expects to place the remaining wells in production over the coming 12 months. Management believes that when all of these wells are equipped and salt water disposal is completed that these wells will produce approximately 500 barrels of oil per day.
2) Black Dragon will now have additional deep drilling rights (in excess of 3000 feet below the surface) held by Gemini to the lake bed of Caddo Lake.
3) 2300 acres of undeveloped mineral interests located on the Texas side of the Texas Louisiana State lines on the north shore of Caddo Lake.
4) 3 oil wells in the Shongaloo and Honore fields in Bossier and Caddo Parishes producing approximately 20 barrels of oil per day.
5) The DVI gas compression station and gathering system in the Pine Island - Caddo Lake area, which are currently processing 7,000 mcf of gas per day and are currently generating $135,000 per month in revenue. In addition to Gemini's gas production, this facility will significantly enhance the value of Black Dragon existing gas properties.
6) Over $4 million of various support equipment including rigs, tug boats etc.
7) Both field and headquarters offices in the Shreveport vicinity
According to Rick Michael, President of Black Dragon, "With this acquisition, Black Dragon has positioned itself to aggressively continue its growth in production and revenues in the concentrated area of Northwest Louisiana's proven, mature oilfields. After closing Black Dragon will have over 2000 wells on over 20,000 acres and significant physical equipment to develop those reserves. Combined current production currently exceeds 18,000 barrels per month and is growing daily. Our goals of 1,000 barrels per day by year end are within sight."
Mr. Eugene DuCharme, CEO of Gemini Explorations added, "We have had a close working relationship with Black Dragon over the last few years and have come to recognize the important synergies that are possible between our two companies. My management team and I look forward to immediately joining forces and taking advantage of the opportunities for growth provided through our joint efforts."
About Black Dragon:
Black Dragon Resource Companies, Inc. is oil and gas production company focused on the acquisition of mature, producing and existing U.S. oil and gas fields. The Company's focus on mature, domestic oil fields eliminates exploration risk, reducing costs, and provides immediate generation of income in a niche market where larger independent and major oil companies are not positioned to compete.
Forward-Looking Statements
Certain information discussed in this press release may constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company's inability to accurately forecast its operating results; the Company's potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company's business. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
Contact:
Strategic Growth International, Inc.
Stan Altschuler / Richard E. Cooper, 212-838-1444
Saltschuler@sgi-ir.com
RCooper@sgi-ir.com
or
Black Dragon Resource Companies, Inc.
Rick Michael, 512-442-4151
www.black-dragonoil.com
