Doral Energy Corp.
OTC Bulletin Board : DEGY

Doral Energy Corp.

July 30, 2009 09:15 ET

Doral Energy Corp. Provides New Mexico Operational Update

MIDLAND, TEXAS--(Marketwire - July 30, 2009) - Marketwire - Doral Energy Corp. (OTCBB:DEGY) ("Doral" or "the Company") announced today that the Company is immediately taking steps to begin operations to recomplete its Federal S No. 7 well in Eddy County, New Mexico, as a Grayburg / San Andres completion. Total cost of this project is estimated to be approximately $250,000. This decision is based on the results of internal Doral engineering and geological evaluations of the wellbore and formations available for recompletion. The Doral Energy - Federal S No. 7 well was originally drilled to a total depth of 5,490' as the Anadarko Petroleum Corp. - Mustang 28 Federal No. 1 well, a Paddock test in October 2001. At the time of the Doral's acquisition of the well as part of the Hanson Energy properties in August 2008, the wellbore was suspended and available for recompletion.

The Federal S No. 7 well is located on Doral's 240-acre Federal S Lease, approximately 0.5 mile south of Loco Hills, NM. Doral Energy has lease rights to a depth of 4,000'. Two (2) wells on the Federal S Lease have produced 170.0 MBO (thousand barrels oil) cumulatively from the Grayburg formation. The Federal S No. 6 well (located 2,800' south of the Federal S No. 7) alone has produced 143.3 MBO from the Grayburg formation. No wells on the Doral Energy leasehold have ever been completed or tested in the San Andres formation, which is productive on offset leases.

Doral Energy plans to first test the San Andres formation prior to completing the well in the Grayburg and San Andres formations. If successful, the Company believes the well may be able to produce in the range of 35-50 BOPD (barrels oil per day) and 25-35 MCFD (thousand cubic feet of gas per day), increasing Doral Energy's total daily production from the Hanson Energy properties by approximately 30%. Results are expected in approximately 3 weeks and updated information will be provided at that time.

Regarding the importance of this recompletion, H. Patrick Seale, Doral's President and Chief Operating Officer, stated, "Recompletion of the Federal S No. 7 well will not only provide Doral with an increase in daily production, but also convert approximately 43 MBOE (thousand barrels of oil equivalent) of net Proved Developed Non-Producing Reserves to the Proved Developed Producing category, based on internal estimates. Additionally, it will provide demonstrated validity of the 11 undeveloped Grayburg-San Andres drilling locations on this leasehold tract, plus another 5 undeveloped locations on our 120-acre Federal X Lease directly north of the Federal S. Together these 16 undeveloped locations will develop approximately 686 MBOE of net reserves at a PV-10% value of approximately $9.2 million to Doral based on in-house engineering, which will be subject to third-party review."

In other field operations, Doral plans to install six (6) replacement pumping units to restore wells to production, and begin a program to mechanically repair another 10 wells currently off production, at an estimated total cost of $110,000. The Company estimates these efforts will restore approximately 40 BOPD of production from its operations in Eddy County.

About Doral Energy Corp.

Doral Energy Corp. (OTCBB:DEGY) is an oil and gas exploitation and production company headquartered in Midland, Texas. Doral Energy Corp.'s strategy is to grow a portfolio of under-developed production and exploitation assets with the potential for generating near-term increases in existing production through operational improvements, and longer-term development of proved undeveloped reserves by infill drilling. Doral focuses on identifying acquisitions that generate immediate cash flow from production, but which also have strong proved developed non-producing and proved undeveloped reserves that can be tapped for significant growth. The prolific Permian Basin of Texas and New Mexico is a geographic region of particular interest for the Company's future acquisition activity. Doral's first producing assets, the Hanson Properties in Eddy County, New Mexico, located in the northwestern Permian Basin of New Mexico, are currently producing 155 BOEPD and have an estimated 6.1 million BOE of total proved reserves based on in-house engineering evaluations.

Further Information

Shareholders and investors are encouraged to visit Doral Energy's website at www.DoralEnergy.com for more information.

On behalf of DORAL ENERGY CORP.

Everett Willard ("Will") Gray, II, Chief Executive Officer

Legal Notice Regarding Forward-Looking Statements

Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed.

Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information on risks for the Company can be found in the Company's filings with the US Securities and Exchange Commission.

Contact Information

  • Doral Energy Corp.
    Everett Willard ("Will") Gray, II
    Chief Executive Officer
    (432) 789-1180
    Website: www.DoralEnergy.com