BDGR: Black Dragon Completes Purchase of Caddo Lakes Mineral Rights; To Add Over $100,000 a Month in Cash Flow
2/6/2006 8:30:02 AM
AUSTIN, Texas, Feb 06, 2006 (BUSINESS WIRE) -- Black Dragon Resource Companies, Inc. (BDGR), announced today that it completed the acquisition of the oil and gas mineral interest for 8,000 acres lying beneath the lake bed of Caddo Lake (the area known as Ferry Lake) in Caddo Parish, Louisiana from Gemini Exploration of Shreveport. Twelve wells are currently in production, and will immediately add to the Company's production and profitability. The acquisition increases the number of wells that the Company currently has an ownership interest in to 1,087.
The acquisition adds 2,000 barrels per month of oil production to Black Dragon and approximately 300 mcf of natural gas per day, and in excess of $100,000 per month to cash flow. The Department of Energy attributes over 2 billion barrels of oil in place to this acreage.
Black Dragon will immediately begin a drilling program on the acreage to exploit the Paluxy Sands (2300 feet below the surface) and shallower proven production zones. Initially two new wells per month will be drilled in areas previously proven but not exploited by Gulf Exploration. Gemini Exploration, with over 35 years experience in the field, will continue as the operator and drilling contractor for these new wells.
Black Dragon will continue the redevelopment of its Pine Island Anocha Chalk wells at current rates and intends on increasing producing wells from 300 to 800 this year.
The acquisition was purchased for $3.2 million, which was a combination of cash and notes. The management of Gemini Exploration includes Eugene Ducharme and Jim Vesselly, both long term veterans of the off-shore oil production business with over 50 years experience.
"This acquisition positions the company for strong growth in 2006," said Rick Michael, Black Dragon's President. "Our total production should exceed 1,000 barrels per day by the end of 2006."
Black Dragon is focused on the recovery of oil and gas reserves through acquisition and project development, specializing in mature and marginal field enhancement, developmental exploitation drilling and low-risk exploration opportunities in the Texas and Louisiana regions.
About Black Dragon:
Black Dragon Resource Companies, Inc. is an 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.
SOURCE: Black Dragon Resource Companies, Inc.
Dragon Resource Companies, Inc.
Rick Michael, 512-442-4151
www.black-dragonoil.com
or
Strategic Growth International, Inc.
Stan Altschuler, 212-838-1444
Saltschuler@sgi-ir.com
or
Richard E. Cooper, 212-838-1444
RCooper@sgi-ir.com
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