SOURCE: Gulf Onshore, Inc.

August 04, 2008 08:00 ET

Gulf Onshore, Inc. Increases Oil Production by Over 40%

DALLAS, TX--(Marketwire - August 4, 2008) - Gulf Onshore, Inc. (OTCBB: GFON) increased its oil production by over 40% from June to July as a result of its Re-Work/Development Program on leases in Throckmorton Co. and Shackelford Co., Texas. A total of four oil wells were restored to production under the Plan in July, with two additional wells re-committed and permitted as injector wells for water disposal.

Gulf Onshore produced 635 BO and sold 674 BO (reflecting carryover May 2008 production) for gross revenues of nearly $90,000 during June 2008. The Company produced 913 BO in July 2008. Sales figures for July, which are based on the purchaser's posted price plus bonus, will be available mid-month.

Gulf Onshore recently re-negotiated its purchaser agreement; oil sales prices for the next 12 months will be based on the monthly weighted NYMEX price, plus a $1.80 per barrel bonus. These increases will go into effect for oil purchased after August 1, 2008.

Gulf Onshore has the capacity to add up to three additional wells per week, based on work-over rig and equipment availability, and Texas Railroad Commission regulations. The Company's inventory of production equipment, including pumps, pump jacks and tubing are maintained on-lease, avoiding delays and expense.

Since acquiring these properties on June 1, 2008, water disposal challenges have been addressed by adding injector wells, allowing the Company to increase production from existing wells and add additional producing wells. Gulf Onshore currently has two more injector wells in the final permitting stages, both of which should be available for use in August 2008.

Some of the wells the company is putting back into production qualify under the State of Texas' Inactive Severance Tax Incentive. Under provision of the Incentive, qualifying wells that have been inactive for two years or more can receive a 10-year exemption from the State's 4.6% (oil) severance tax

About Gulf Onshore, Inc.

Gulf Onshore, Inc. is an oil and gas company with a focus on oil and gas prospects and properties which require further development. Gulf is careful to develop a thorough drilling plan using advanced technologies in both mapping and the use of 3D seismic reports and information. Gulf trades under the ticker symbol GFON.OB on the OTCBB.

This Press Release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects," "intends," "projects," "plans," or similar phrases may be deemed "forward-looking statements." Although Gulf Onshore, Inc. believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to oil and natural gas prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and gas prices and other risk factors.

Contact Information

  • Contact:

    Taylor Capital, Inc.
    Stephen Taylor
    973.351.3868