Rock Energy Resources Corporate Update Available On Website
New Guidance and Drilling Update Provided
HOUSTON — (PR NEWSWIRE) — January 26, 2009 — Rock Energy Resources, Inc. (OTCBB:RCKE), an independent domestic oil and natural gas company, today announced that it has published a new corporate presentation on its website. Notable in the update is new guidance numbers and recent drilling activity by an offset operator in its Bob West project area.
The presentation notes that the Company’s projections are contingent on two capital raises for net proceeds totaling $25 million. The first is a contemplated debt financing for net proceeds of $10 million. The Company hopes to close a debt financing in the first quarter of 2009. The second financing is a targeted equity raise of $15 million for the third quarter of 2009. At this point, the Company does not have any firm commitments for the equity financing.
For 2009, and contingent on financings outlined above, the Company has budgeted capital expenditures of $23.8 million. Of this amount, 63%, or $15 million, is focused on the Wilcox trend natural gas properties. Rock estimates its finding and development costs in both the Bob West and Garwood areas at under $1 per MCF, and in its financial projections has used a natural gas price of $5 per MCF held flat for the life of the properties.
Based on these assumptions and others as detailed in the new presentation, Rock now estimates its total revenues for 2009 at $17 million; EBITDA at $8 million and positive net income. For 2010, Rock estimates its total revenues at $32 million; EBITDA at $19 million and net income at $7.6 million. The 2010 estimates assume a capital expenditure budget of $20 million, with $12.6 million allocated to the Wilcox trend.
Also noted in the presentation is a recently drilled successful well immediately offsetting the Bob West project, as well as a second well now being drilled by the same operator. This activity is highly noteworthy, not only due to its extremely close proximity to the Rock acreage, but also its validation of high productivity wells on the downthrown side of the Bob West structure fault block where Rock’s acreage is located.
Commenting further on the presentation, Rocky Emery, the Company’s CEO noted, “In the current environment of low hydrocarbon prices, we are pleased to note to the investment community the strength of our natural gas assets. Our finding and development costs are among the lowest in our peer group. The recent success of the offset operator at Bob West is exciting for us and has moved the Bob West project into what we regard as a development scenario. Our California assets continue to be appealing, however given the attractiveness of our gas properties, that is now a central focus for our Company. We are working diligently to conclude our debt financing, which of course is essential for our initiating our 2009 capital program. Assuming we are successful in these efforts, we will differentiate ourselves among our peers as one of the few companies able to demonstrate material year to year revenue growth and bottom line net income profitability.”
About Rock Energy Resources, Inc.
Originally formed in April of 2004 as Rock Energy Partners LP, Rock Energy Resources is a domestic oil and gas company based in Houston, Texas. With its partners, Rock Energy is engaged in producing oil from the Diatomite and Monterey formations in the Orcutt field and from the NW Casmalia Diatomite field – both located in Santa Barbara County, California, where there is a known resource base of over 2.5 billion barrels of oil in place.
Natural gas projects include the Company’s 100% working interest in the prolific Wilcox trend in the Garwood field - a leasehold of 1,650 acres in Colorado County, Texas with 3P reserves estimated to be 40 billion cubic feet; and a 100% working interest in the Bob West Prospect, a 1,110 acre leasehold in Starr County, Texas with Wilcox discovery potential equal to 250 billion cubic feet.
For more information, please visit www.RockEnergyResources.net.
Safe Harbor Forward-Looking Statements
Forward-looking statements made in this release are made pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements made herein are not a guarantee of future performance. This news release includes forward-looking statements, including with respect to the future level of business for the parties. These statements are necessarily subject to risk and uncertainty. Actual results could differ materially from those projected in these forward-looking statements as a result of certain risk factors that could cause results to differ materially from estimated results. Management cautions that all statements as to future results of operations are necessarily subject to risks, uncertainties and events that may be beyond the control of Rock Energy Resources, Inc., and no assurance can be given that such results will be achieved. Potential risks and uncertainties include, but are not limited to, the ability to procure, properly price, retain and successfully complete projects, and changes in products and competition.
For More Information, Please Contact:
ROCK ENERGY RESOURCES, INC.
Rocky Emery, CEO
713-954-3600
ELITE FINANCIAL COMMUNICATIONS GROUP
Dodi B. Handy, President and CEO
407-585-1080 or via email at RCKE@efcg.net.
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