SOURCE: Treaty Energy Corporation

October 29, 2009 10:27 ET

Treaty Energy Corporation Announces LOI to Acquire Oil & Gas Lease in Louisiana

This Converse, Louisiana Lease Includes 56 Wells on 600 Acres With Estimated Production Expected to Exceed 95 BBLS per Day Upon Completion of Rework Program

HOUSTON, TX--(Marketwire - October 29, 2009) - Treaty Energy Corporation (OTCBB: TECO) today announced that it has entered into a letter of intent to purchase 56 wells on 600 acres near Converse, Louisiana. This purchase will include all pumps and equipment to operate the wells.

There are currently 13 wells in production on this property producing 22 BBLS of oil per day, and a program is in place to rework the balance of the wells with estimated production to then exceed 95 BBLS per day. With estimated reserves of one million BBLS at a discounted price of $60 per BBL, this project represents a significant addition to Treaty Energy.

The terms of the purchase are $350,000 cash at closing and one year owner financing for $650,000.

Additionally, Treaty Energy will repurchase a 6% royalty for $20,000 which will allow the company an 81% net of royalty interest. The company, by agreement, will have a short period for due diligence and to prepare an updated Reserve Report. Assuming satisfactory due diligence, the closing is to occur on or about November 15, 2009.

Randall Newton, CEO and Chairman of Treaty Energy Corporation, stated, "We are pleased to be adding this 56 well property to our oil producing assets."

Mr. Newton stated further, "Based on actual production from the currently producing wells of approximately 1.7 BBLS per day on this Louisiana property, and assuming $60 oil and the cost of reworking 8 wells per month until all wells are functional, we estimate payback on this acquisition at about 14 months."

Because of the very short closing time Treaty Energy would have passed on this opportunity, but as a result of the actions of Treaty's CEO, Randall Newton, in aggressively building the Treaty organization, including the recent additions of President and Director Joe Grace and Director Dan Olson, many new and exciting opportunities are now coming within the reach of Treaty Energy Corporation.

"Our investors should know that since my appointment to the board we have reviewed six new opportunities for possible acquisition by Treaty Energy. It is anticipated that more announcements will soon be forthcoming," stated Joe Grace, Treaty Energy's newly elected President.

About Treaty Energy Corporation

Treaty is engaged in the acquisition, development and production of oil and natural gas. Treaty acquires and develops oil and gas leases which have "proven but undeveloped reserves" at the time of acquisition... These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration. Treaty's headquarters is located in Houston, Texas. For more information go to: www.treatyenergy.com

Forward-Looking Statements:

Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company's filings with the Securities and Exchange Commission, including Forms SB-2, 10-KSB, 10-QSB and 8-K. Actual results may differ materially from such forward-looking statements.

Contact Information

  • Contact:
    Osprey Partners
    Tel: 732-292-0982
    Fax: 732-528-9065
    investors@treatyenergy.com

    Investor Relations:
    Equiti-trend Advisors LLC
    (800) 953-3350 toll-free
    (858) 436-3350 local