Black Dragon Resource Companies Inc (BDGR)

[choctaw 02]

This Field Is About 15 Miles East Of Oil City.


Press Release Source: Southern Star Energy Inc.

Southern Star Energy Reports Year-End 2008 Reserves; Company Actively Evaluating Asset for Haynesville Potential
Monday June 30, 9:00 am ET


HOUSTON, June 30 /PRNewswire-FirstCall/ -- Southern Star Energy Inc. (OTC Bulletin Board: SSEY - News), a fast-growing E&P company with reserves and production from leases located in northern Louisiana, today announced its year-end May 31, 2008 estimated total proved reserves, and probable and possible reserves from its Sentell Field. The table below represents estimates attributable to interests owned by Southern Star Energy and only measure the Cotton Valley sands. The estimates for Southern Star's proved reserves were evaluated by H.J. Gruy, an independent reservoir-engineering firm, in accordance with SEC guidelines and from data provided by Southern Star. Gruy also evaluated the estimates of Southern Star's probable and possible reserves. Only proved reserves can be included in documents filed with the SEC.




Undiscounted Discounted at
Estimated 10% Estimated
Future Future
Oil and Net Cash Net Cash
Category NGL, MBbls Gas, MMcf Gas, MMcfe Flow, $M Flow, $M

Proved
developed
Producing 14.9 720.5 810.1 $7,639.4 $5,298.4
Non-producing 5.0 287.3 317.4 2,490.9 416.6
Proved
undeveloped 44.0 2,193.4 2,457.4 12,098.5 3,714.6
Total proved* 63.9 3,201.2 3,584.9 $21,228.8 $8,498.3

Probable 142.4 7,231.9 8,086.3 $75,287.8 $42,081.9
Possible 32.1 1,600.9 1,633.0 $15,176.5 $8,162.7


*Totals may not add due to rounding and facility cost reductions.

The estimated future net cash flows for the Company's proved, probable and possible reserves were calculated using $124.79 for oil, $2.10 for natural gas liquids (NGL) and $10.67 for natural gas, and held constant for the period 2008 through 2022.

Haynesville Shale Evaluation

The Company disclosed that it is actively evaluating the potential for drilling and producing natural gas from the Haynesville Shale, an emerging natural gas play, in its Sentell Field. Numerous vertical and horizontal wells have been drilled, logged and put into production from the Haynesville formation within a 30-mile radius of Southern Star's Sentell Field. Other operators have reported in their public disclosures that certain wells targeting the Haynesville formation have initial production rates of at least 8 million cubic feet per day with flowing casing pressure of 5,000 pounds per square inch. Southern Star's 5,700-acre Sentell Field has the potential for about 35 Haynesville wells positioned on 160-acre spacing. There are no probable or possible reserve estimates for the Haynesville Shale potential in Southern Star's year-end 2008 reserve report.

David Gibbs, Southern Star President and Chief Executive Officer said: "From a valuation perspective, the year-end 2008 reserve report offers a first glimpse into how quickly our drilling and completion work added reserves and established a foundation for our future. We are cash flow positive each month, a true testament to our work. Further, recent transactions by operators, notably EnCana's $457 million purchase of 88,920 acres in northern Louisiana and Chesapeake Energy's leasehold swap for prospective Haynesville acreage in East Texas for approximately $17,000 per acre are clear indicators of how the industry values the vast potential of the Haynesville Shale. We will begin a 10-well drilling program in August, and will start by drilling two Cotton Valley wells before drilling our first vertical Haynesville test well. We have an exciting opportunity to convert our proved undeveloped Cotton Valley inventory into cash flow as part of our 2008/2009 drilling program and we will perform an extensive technical evaluation of the Haynesville potential. We have an exciting 12 months ahead of us."

About Southern Star Energy

Southern Star Energy's strategy is to acquire under-drilled oil and natural gas leases with significant proven development drilling opportunities, and use all available technologies to increase the valuation of the acquired assets. This strategy reduces Southern Star's risk, allowing the Company to build free cash flow for strategic acquisitions. The Company owns a 40% working interest in approximately 5,700 acres in the Sentell Field, located in the heart of the known Cotton Valley trend north of Shreveport, La. To date, the Company has drilled five successful tests of the Cotton Valley sands, all of which are connected to the market, and producing revenues. The Company will embark on a 10-well development program in the third quarter of 2008, drilling for the Cotton Valley sand and Haynesville shale. Shareholders and prospective investors and analysts are encouraged to visit Southern Star Energy's website: http://www.ssenergyinc.com to learn more about the Company and the Cotton Valley Trend.

Cautionary Statements to Shareholders

Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the safe harbor provisions in the Private Securities Legislation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Southern Star Energy's actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things: volatility of natural resource prices; product demand; market competition and risks inherent in Southern Star Energy's operations. Southern Star makes undertakes no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise, unless so required by applicable laws or regulatory policies.




--------------------------------------------------------------------------------
Source: Southern Star Energy Inc.