Feb 13, 2007 16:47:00 (ET)
APALACHICOLA, Fla., Feb 13, 2007 /PRNewswire-FirstCall via COMTEX/ -- Phillip Ware, President and Chief Executive Officer of Coastal Caribbean Oils & Minerals, Ltd. (OTC Bulletin Board: COCBF.OB) ("Coastal Caribbean" or the "Company"), announced today that the Company's wholly owned subsidiary, Coastal Petroleum Company ("Coastal"), signed a Letter of Intent with Victory Energy Corporation ("Victory") (OTC Bulletin Board: VYEY.OB) to conduct a drilling program on Coastal's Valley County, Montana leases ("Leases").
The Letter of Intent sets out the substantive terms of a Formal Agreement ("Agreement") that Coastal and Victory will complete and execute within sixty days. Under the Agreement, Victory will be required to drill a minimum of three wells on the Leases and to make payments totaling $1,225,000 over the next fourteen months to Coastal in return for a 50% interest in Coastal's existing leases. Ware said: "We are excited about the formation of the team of Coastal and Victory Energy Corporation to develop the potential of our enormous Valley County leases. Victory brings a great deal to the play and we are looking forward to working together."
Victory will commence drilling the first well to test one of Coastal's Lodgepole Reef prospects within three months of the execution of the Agreement. A second well will be started within four and half months to test a 34,000 acre shallow gas prospect on the leases. The third well under the Agreement will be drilled to test another of Coastal's Lodgepole Reef prospects and will begin within eight months of the Agreement. Victory will earn a 50% working interest in the spacing unit covered by each well while Coastal will retain the other 50% of the working interest. Victory will also earn an undivided 1/6th working interest in all of Coastal's Valley County Leases after each well is drilled.
After the three wells are drilled, Coastal and Victory will each have a 50% working interest in all of the Valley County, Montana leases. The parties have also agreed to work together to explore an Area of Mutual Interest within twenty miles of the Leases, encompassing approximately 1,000,000 acres.
In addition, Coastal noted that completion efforts have recommenced today on the Evaline twin well on which Coastal and its partners began operations during the second half of 2006. These operations will determine whether or not economic quantities of oil or gas are present in the well. The final drilling results will remain confidential until the well completion and testing process is completed.
Founded 54 years ago, Coastal Caribbean Oils & Minerals, Ltd., is engaged in the exploration for and development of oil and gas reserves through its wholly owned subsidiary, Coastal Petroleum. Coastal Petroleum's principal assets are its cash and its non-producing oil and gas leases within the Williston Basin, covering approximately 9,000 net acres in North Dakota and approximately 137,000 net acres in Montana.
Certain statements included in this press release, which are not historical in nature, are intended to be forward-looking statements. Coastal Caribbean cautions readers that forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements.
SOURCE Coastal Caribbean Oils & Minerals, Ltd.
