SOURCE: Bonanza Oil and Gas Inc.

March 02, 2010 09:45 ET

Bonanza Oil and Gas Signs LOI to Purchase Interest in a Producing Oil Well and Additional Acreage in Oklahoma

HOUSTON, TX--(Marketwire - March 2, 2010) -  Bonanza Oil & Gas, Inc., a Nevada Corporation (OTCBB: BGOI) (the "Company"), an independent oil and gas development company, has entered into a Letter of Intent ("LOI") to purchase a 10% interest in a producing well on 160 acres with an option on an additional 800 acres, located in Garfield County, Oklahoma.

Under the terms of the LOI, the Company will purchase the interest in exchange for cash and 15 million shares of restricted stock of the Company. According to the operator of the property, there are an additional six locations, with each location having a possible two horizontal legs per well. The operator believes there are approximately 200,000 barrels of oil and four billion cubic feet of gas that are recoverable from each horizontal leg in this prospect.

"This is an exciting time for our company. We expect this acquisition, upon an acceptable closing, to increase our cash flow from operations. Bonanza expects to continue its strategy to buy currently producing wells that have potential for future growth," stated Bill Wiseman, CEO of the Company.

About Bonanza Oil & Gas, Inc.

Based in Houston, TX, Bonanza Oil and Gas, Inc. holds assets ranging from current producing properties, wholly owned prospects, to developing working interests in Proven Undeveloped (PUDS) properties.

The above transaction is subject to the drafting and negotiation of a final definitive agreement, performing due diligence as well as board approval of the Company. As such, there is no guarantee that the Company will be able to successfully close the above transaction.

Forward-Looking Statement

Some of the statements made by the Company in this press release are forward-looking in nature. Actual results may differ materially from those projected in forward-looking statements. The Company believes that its primary risk factors include, but are not limited to: production variances from expectations, volatility of product prices, inability to raise sufficient capital to fund its operations, environmental risks, competition, government regulation, and the ability of the Company to execute its business strategy, among others. Additional information concerning these and other important factors can be found within the Company's filings with the Securities and Exchange Commission.

Statements in this press release should be evaluated in light of these important factors.

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