SOURCE: US Oil & Gas Corp

US Oil & Gas Corp

January 06, 2010 10:32 ET

United States Oil & Gas Corporation Closes Acquisition of North Dakota Services Company; to Take Advantage of Proximity to Bakken Formation; Existing Propane Customer Sales Growth Expected to Double

AUSTIN, TX--(Marketwire - January 6, 2010) - United States Oil & Gas Corporation (PINKSHEETS: USOG), a growing oil and gas products, services and technology company, is pleased to announce that it has closed its acquisition of United Oil ("United"), a profitable North Dakota-based distributor of refined fuels and other oil-based products. United, along with Turnbull Oil, which USOG purchased in May 2009, is now a wholly owned operating subsidiary of USOG. The purchase was made using a combination of cash, stock and promissory note.

During 2010, the Company will explore available efficiencies from the combined operations with Turnbull. CEO, Alex Tawse commented, "One of our competitive strengths is that our management possesses a unique experience and skill set with improvement of operational efficiencies. We will utilize that strength to lower costs and increase profit."

In addition, there is also significant opportunity for growth through marketing both at the local level and through the increased exposure that comes with being a public company. Notwithstanding the fact that to date United has done very little to no advertising or direct marketing, revenue is expected to total $8 million for the year ending December 31, 2009, with steady growth moving forward. Revenue for 2008 totaled $7 million, to-date the company's best on record. More details of United's earnings will be provided after the quarter ends.

Importantly, the Bakken Formation discovery in North Dakota, with its estimated 500 billion barrels of accessible oil, the largest since Alaska's Prudhoe Bay, significantly improves the economic landscape for the area. United is well positioned to take advantage of the increased demand for fuel that will come from additional prospecting and drilling that is forecasted.

Last year, United signed 156 new propane customers, 65 of which were added in the fourth quarter alone. During 2010, the company expects to deliver 700,000 gallons of propane to its existing customer base. This represents a 54% increase over sales during 2009. On a dollar basis it equates to approximately $1.25 million of revenue at today's prices.

As the price of propane has increased materially in recent months, United has also benefited from the summer purchase of forward hedges for a significant portion of its propane supply. Now selling at around $1.80 per gallon in N. Dakota, propane prices have risen to over 90% since the summer.

As previously reported, USOG's purchase of United includes all property, equipment and six acres of developable land. Besides United Oil and Gas, Inc., United Propane, United C-Store and an additional gas station and C-store that will soon be operational are part of the acquisition.

Management, which has over 30 years experience in the industry, is contracted to remain with the business for a minimum of three years. The company was started in 2003, and includes a bulk storage plant, and a fleet of tanker trucks.

Located in the northern central portion of North Dakota, United is a profitable oil and gas distribution company which sells diesel, race gasoline, propane, and lubricants to over 400 customers including regional businesses, farms, and private residences. The company offers personal customer service and premium pricing; comparative advantages that have helped attract new customers and increase market share.

About United States Oil & Gas Corp. (USOG.PK)

United States Oil & Gas Corp. is focused on acquiring and growing domestic oil and gas services companies. The company targets small to mid size family-run businesses with historically profitable results, strong balance sheets, high profit margins, and solid management teams in place. The company made its first acquisition, Turnbull Oil, on May 15, 2009. In addition to its acquisition strategy, the company intends is to acquire and/or develop and deploy proprietary technologies that will explore or extract oil and gas trapped in the earth using the latest technologies that create the smallest ecological footprint as possible. The company has two patents pending that support this ancillary strategy but does not rely on revenue generation from this technology in its financial projections.

This Press Release may contain certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. USOG has tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "expects," "plans," "intends," "potential" and similar expressions. These statements reflect USOG's current beliefs and are based upon information currently available to it. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause USOG's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. USOG undertakes no obligation to update or provide advice in the event of any change, addition or alteration to the information catered in this Press Release including such forward-looking statements.

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