Capco (fka CGYN)

[flemsnopes]

Capco Terminates Merger Talks With Pyramid and Announces Plan to Divest Certain Assets



Wednesday September 19, 9:00 AM EDT


Capco Energy, Inc. ("the Company" or "Capco") (CGYN) today announces that the Company has terminated its plan of business combination with Pyramid Petroleum, Inc ("Pyramid"), a related party. Instead the Company has contracted to sell a wholly owned subsidiary that has certain OCS producing properties to Pyramid at a contracted purchase price of $11 million. The sale is subject to obtaining a release from the Company's commercial lender and receiving a Fairness Opinion. The purchase price was determined primarily based upon the proved and probable reserves and miscellaneous other values attributed to the assets and is subject to adjustments for the net operating revenue from the properties for the period from January 1, 2007 to the closing date and working capital at the closing date. The Company has received a deposit of $200,000 and expects to receive approximately $6 million at closing. Proceeds from the sale shall essentially reduce Capco's debt with its commercial lender.



Capco will continue its operations of Texas offshore, onshore and Oklahoma properties with a significantly reduced debt burden and a substantial reduction in its G&A expenses. These remaining properties compromised approximately 65% of the Company's proved reserves at year-end 2006.

Safe Harbor Statement under the Private Securities Litigation reform Act: The information herein contains forward-looking statements based on assumptions that may prove not to have been accurate. The business activities of Capco, as usual to its industry, are subject to many risks both calculable and incalculable. Included in these risks are oil and gas prices, the need to develop replacement reserves, the reliability of reserve estimates, and the feasibility of extracting reserves, environmental risks, drilling and operating risks, and the ability of the Company to implement its business strategy. These and other risks are identified in our SEC filings and should be considered in evaluating the forward-looking statements made herein. These risks could cause actual financial results to vary from those anticipated.

For further information about the Company please call Laura Boyko [phone] ext. 101or visit our website at www.capcoenergy.net.


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Laura Boyko
Capco
[phone] ext. 101
www.capcoenergy.net