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WEDNESDAY, JANUARY 07, 2004 6:02 AM
- PR Newswire
PTGC
0.26 +0.05
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HOUSTON, Jan 07, 2004 /PRNewswire-FirstCall via Comtex/ -- Petrogen Corp., (PTGC) today announced that it has been assigned 100 percent of the oil and gas assets of its affiliate company Petrogen International Ltd. ("PIL"), a private partnership created by the Company's founders prior to the formation of Petrogen Corp. An exclusive operating agreement entered into between the Company and PIL (the "Operating Agreement") has also been terminated, eliminating a 10 percent carried interest on existing and future properties and a 10 percent operating expense paid to PIL for developments on all oil and gas properties. This action positions the Company to more clearly streamline its business operations and corporate and financial structure while increasing the Company's asset base by 10 percent and reducing its development costs by 10 percent. Moreover, the assignment of assets provides Petrogen Corp. access to an additional development opportunity on a new property located in the Permian Basin.
In order to eliminate any potential conflict of interest, the Company has not paid any consideration to PIL for transfer of these assets or for termination of the Operating Agreement. PIL retains its previously held ownership of approximately 1.7 million restricted shares of Petrogen common stock and will therefore benefit in conjunction with the Company's shareholders from the greater upside potential associated with a larger asset base with zero equity dilution.
"With Petrogen's growth, a more substantial management team and greater access to capital, Petrogen no longer benefits from the relationship with PIL," stated Sacha H. Spindler, Petrogen's Chairman and Chief Executive Officer. "This more simple structure immediately increases the assets of the Company at no cost and gives us an improved platform for growth."
The Company's core oil and gas properties are located in the Baxterville Field in southern Mississippi, Enos Creek Field in central Wyoming and Emily Hawes Field in southern Texas, which together represents a net interest of approximately 27.9 billion cubic feet ("Bcf") equivalent of proven reserves (71 percent natural gas). Pursuant to the termination of the Operating Agreement, the 10 percent carried interest in these assets that was previously assigned to PIL reverts to the Company and thereby increases Petrogen Corp.'s net proved reserve base to approximately 31.0 Bcf of gas equivalent, with an average net revenue interest of 77.1 percent. Furthermore, the Company now has the right to operate these and future properties or utilize other operators at its discretion.
Additionally, PIL is providing Petrogen Corp. access to a substantial new development opportunity located in the Permian Basin, which will become the Company's fourth area of operation. PIL has also assigned to the Company for no consideration 100 percent of its right, title and interest in a Farm-In Agreement entered into with Adams Fee Properties, Inc. of Midland, Texas (the "Farm-In Agreement"), to the nine thousand acre Adams Ranch prospect in Crockett County, Texas (the "Property"). The Farm-In Agreement provides Petrogen Corp. the right to fully develop the Property through a series of earn-in development initiatives to exploit what initial internal analyses estimates could be a potential natural gas resource base of 42.8 Bcf associated with the Canyon, Strawn and Ellenberger formations, however, independent third party analysis is not expected until early 2004. The Company's net revenue interest in the estimated reserves is 75 percent.
Specifically, the Property represents the opportunity to develop 24 Canyon sand PUD wellbore locations and 8 commingled Strawn and Ellenberger wellbore locations, as well as the potential opportunity to develop an additional 72 Canyon PUD locations. The Canyon sand formation has provided historical pays of approximately 0.3 Bcf of gas on average per wellbore, the Strawn formation historically pays 1.5 Bcf of gas on average per wellbore and the Ellenberger formation historically pays 5.0 Bcf of gas on average per wellbore. The Property is located within the Permian Basin, considered to be one of the most prolific oil and gas producing regions in the United States, and is flanked on all four sides by significant oil and gas production and infrastructure. In addition to providing substantial long term growth potential, there are currently 17 wellbores in various stages of production that the Company can re-stimulate to establish an initial base of production.
Petrogen Corp. is an oil and natural gas development and production company with operations based in Houston, Texas. It is engaged in the acquisition of oil and natural gas properties throughout the continental US that possess proven reserves representing significant upside development potential. The Company specializes in the development and expansion of proven producing, non-producing, undeveloped and behind pipe reserves while maintaining a financially stable fiscal strategy. Petrogen aggressively approaches its acquisitions strategy with a specific emphasis placed upon the expansion of its natural gas reserves. For further information, please visit the Company's website at www.petrogencorp.com .
THIS NEWS RELEASE MAY INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, WITH RESPECT TO ACHIEVING CORPORATE OBJECTIVES, DEVELOPING ADDITIONAL PROJECT INTERESTS, THE COMPANY'S ANALYSIS OF OPPORTUNITIES IN THE ACQUISITION AND DEVELOPMENT OF VARIOUS PROJECT INTERESTS AND CERTAIN OTHER MATTERS. THESE STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.
WEDNESDAY, JANUARY 07, 2004 6:02 AM
- PR Newswire
PTGC
0.26 +0.05
Enter Symbol:
Enter Keyword:
HOUSTON, Jan 07, 2004 /PRNewswire-FirstCall via Comtex/ -- Petrogen Corp., (PTGC) today announced that it has been assigned 100 percent of the oil and gas assets of its affiliate company Petrogen International Ltd. ("PIL"), a private partnership created by the Company's founders prior to the formation of Petrogen Corp. An exclusive operating agreement entered into between the Company and PIL (the "Operating Agreement") has also been terminated, eliminating a 10 percent carried interest on existing and future properties and a 10 percent operating expense paid to PIL for developments on all oil and gas properties. This action positions the Company to more clearly streamline its business operations and corporate and financial structure while increasing the Company's asset base by 10 percent and reducing its development costs by 10 percent. Moreover, the assignment of assets provides Petrogen Corp. access to an additional development opportunity on a new property located in the Permian Basin.
In order to eliminate any potential conflict of interest, the Company has not paid any consideration to PIL for transfer of these assets or for termination of the Operating Agreement. PIL retains its previously held ownership of approximately 1.7 million restricted shares of Petrogen common stock and will therefore benefit in conjunction with the Company's shareholders from the greater upside potential associated with a larger asset base with zero equity dilution.
"With Petrogen's growth, a more substantial management team and greater access to capital, Petrogen no longer benefits from the relationship with PIL," stated Sacha H. Spindler, Petrogen's Chairman and Chief Executive Officer. "This more simple structure immediately increases the assets of the Company at no cost and gives us an improved platform for growth."
The Company's core oil and gas properties are located in the Baxterville Field in southern Mississippi, Enos Creek Field in central Wyoming and Emily Hawes Field in southern Texas, which together represents a net interest of approximately 27.9 billion cubic feet ("Bcf") equivalent of proven reserves (71 percent natural gas). Pursuant to the termination of the Operating Agreement, the 10 percent carried interest in these assets that was previously assigned to PIL reverts to the Company and thereby increases Petrogen Corp.'s net proved reserve base to approximately 31.0 Bcf of gas equivalent, with an average net revenue interest of 77.1 percent. Furthermore, the Company now has the right to operate these and future properties or utilize other operators at its discretion.
Additionally, PIL is providing Petrogen Corp. access to a substantial new development opportunity located in the Permian Basin, which will become the Company's fourth area of operation. PIL has also assigned to the Company for no consideration 100 percent of its right, title and interest in a Farm-In Agreement entered into with Adams Fee Properties, Inc. of Midland, Texas (the "Farm-In Agreement"), to the nine thousand acre Adams Ranch prospect in Crockett County, Texas (the "Property"). The Farm-In Agreement provides Petrogen Corp. the right to fully develop the Property through a series of earn-in development initiatives to exploit what initial internal analyses estimates could be a potential natural gas resource base of 42.8 Bcf associated with the Canyon, Strawn and Ellenberger formations, however, independent third party analysis is not expected until early 2004. The Company's net revenue interest in the estimated reserves is 75 percent.
Specifically, the Property represents the opportunity to develop 24 Canyon sand PUD wellbore locations and 8 commingled Strawn and Ellenberger wellbore locations, as well as the potential opportunity to develop an additional 72 Canyon PUD locations. The Canyon sand formation has provided historical pays of approximately 0.3 Bcf of gas on average per wellbore, the Strawn formation historically pays 1.5 Bcf of gas on average per wellbore and the Ellenberger formation historically pays 5.0 Bcf of gas on average per wellbore. The Property is located within the Permian Basin, considered to be one of the most prolific oil and gas producing regions in the United States, and is flanked on all four sides by significant oil and gas production and infrastructure. In addition to providing substantial long term growth potential, there are currently 17 wellbores in various stages of production that the Company can re-stimulate to establish an initial base of production.
Petrogen Corp. is an oil and natural gas development and production company with operations based in Houston, Texas. It is engaged in the acquisition of oil and natural gas properties throughout the continental US that possess proven reserves representing significant upside development potential. The Company specializes in the development and expansion of proven producing, non-producing, undeveloped and behind pipe reserves while maintaining a financially stable fiscal strategy. Petrogen aggressively approaches its acquisitions strategy with a specific emphasis placed upon the expansion of its natural gas reserves. For further information, please visit the Company's website at www.petrogencorp.com .
THIS NEWS RELEASE MAY INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED, WITH RESPECT TO ACHIEVING CORPORATE OBJECTIVES, DEVELOPING ADDITIONAL PROJECT INTERESTS, THE COMPANY'S ANALYSIS OF OPPORTUNITIES IN THE ACQUISITION AND DEVELOPMENT OF VARIOUS PROJECT INTERESTS AND CERTAIN OTHER MATTERS. THESE STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.
