SOURCE: Georgia Exploration Inc.

February 16, 2007 13:46 ET

Georgia Acquires Oil and Gas Interest and Lease Acreage in Kansas

HOUSTON, TX -- (MARKET WIRE) -- February 16, 2007 -- Georgia Exploration, Inc. (OTCBB: GXPL) is pleased to announce that it has acquired certain oil and gas lease interests in the Mound Branch Prospect located in Elk County, Kansas that totals approximately 8,800 acres gross, as well as working interests in nine existing well bores and associated facilities and equipment that have been drilled on the acquired lease acreage. For the existing drilled wells, the Company's working interest ranges from 25.0% to 100.0%. For all undrilled lease acreage the Company holds a 100.0% working interest and 74.0% net revenue interest in lease acreage under the oil and gas leases acquired. Flow and other testing of the existing drilled wells are in process.

The acquisition was made pursuant to a purchase and sale agreement between Georgia, Orbit Energy, LLC and Wharton Resources LP (wholly owned by Georgia) in consideration for $6,800,000 less $760,947 for testing, evaluation and other associated Mound Branch costs previously advanced by Wharton to, or paid on the behalf of, Orbit. The purchase consideration was comprised of the issuance to Orbit of 4,039,053 shares in the common stock of Georgia, at a deemed price of $1.00 per share and by issuing Orbit a thirty-six month convertible unsecured debenture of Georgia in the principal amount of $2,000,000, bearing simple interest at the rate of 10% per annum payable quarterly in arrears. The principal amount of the Debenture may be converted by Orbit in whole or in part to acquire shares in the common stock of Georgia at $1.00 per Debenture share, at any time after twelve months from the effectiveness of the acquisition. After thirty-six months all unpaid interest and principal on the Debenture become due on demand.

The 4,039,053 shares issued in the purchase will be placed in escrow with an escrow agent, and released upon Orbit's delivery to the escrow agent within 12 months from the closing of the purchase of an independent report assessing the fair value of the purchased assets at no less than the purchase price of $6,800,000. The amount of the convertible debenture represents the approximate amount of capital investments incurred by Orbit in the acquisition and development of the Mound Branch Prospect.

Orbit Energy, LLC is a Nevada limited liability company beneficially owned by Wm. Milton Cox the Chief Executive Officer of Georgia, and Paragon Capital Corp. of which Bassam Nastat, the President of Georgia, serves as manager. Messrs. Cox and Nastat are also directors of Georgia Exploration.

This press release may include forward-looking statements based on the Company's current expectations as to future events. The forward-looking events and circumstances discussed in this press release might not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. For example, the extraction and sale of natural gas from the wells involves a number of costs and risks, which may limit our ability to generate cash flow from the wells. In addition, the business of Georgia Exploration is subject to a number of risks typical of an oil and gas exploration and development company including, among other things, the inherent uncertainties associated with oil and gas exploration; laws, environmental, judicial, regulatory, political and competitive developments in areas in which Georgia Exploration operates; and technological, mechanical and operational difficulties encountered in connection with Georgia Exploration's activities.

The securities referred to herein have not been registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Contact Information

  • For more information, contact:

    Georgia Exploration, Inc.
    Sam Nastat
    President & Director
    Tel. (713) 355-7001