SOURCE: Paxton Energy, Inc.

January 05, 2011 11:00 ET

Paxton Energy Acquires Majority Interest in Quinta Wells

Production Expected to Begin Within Next 60 Days

SAN FRANCISCO, CA--(Marketwire - January 5, 2011) - Paxton Energy, Inc. (the "Company") (OTCBB: PXTE), an energy turnaround company engaged in the acquisition, exploration, development and drilling of oil and natural gas properties, is pleased to announce the signing of an agreement to form a limited liability company that will acquire a majority working interest in the Quinta Wells, a 60 Acre property located in Brown County, Texas.

On January 4, 2011, the Company entered into an agreement with Lighthouse Petroleum, Inc., a Delaware corporation, pursuant to which the parties will be forming PaxTex, LLC, a Nevada limited liability company. Under the agreement, PaxTex, LLC will acquire from Lighthouse Petroleum, Inc. a majority interest in the leased oil & gas wells, working interests and equipment relating to three wells, commonly known as the Quinta Wells.

The property contains three wells, two of which are currently in active production, with the third to be converted to a salt water disposal well. Based on internal engineering reports, the wells contain reserves valued at $2.2 million at PV-10 (present value at a discount rate of 10%). These wells require a rework program, after which production rates are forecast at 40 barrels of oil per day producing an annual running rate exceeding $750,000. Recoverable reserves over a ten year period are estimated at more than 117,000 barrels. Rework is expected to be completed and increased production to begin in the next 30-60 days.

"This is part of reorganization and restructuring as outlined in the Company's Change of Control Agreement," stated Charles Paxton, Chairman and CEO of Paxton Energy. "Since March 2010, the Company has completed two reverse stock splits, settled ratchet and penalty debt in the amount of $709,000 and satisfied accounts payable debt of $193,000 for shares, and acquired a new leased property with proven reserves. We continue to evaluate additional acquisition opportunities containing proven oil and gas reserves." 

About Paxton

Paxton Energy, Inc. engages in the acquisition, exploration, development and drilling of oil and natural gas properties. Paxton is an energy turnaround company whose strategy is to acquire cash flow producing properties with proven reserves, develop the fields by reworking existing wells and drilling new wells. The Company was founded in 2004 and is based in Carson City, Nevada.

Cautionary Note to U.S. Investors

Effective January 1, 2010, the United States Securities and Exchange Commission (SEC) now permits oil and gas companies, in their filings with the SEC, to disclose not only "proved" reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also "probable" reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as "possible" reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). As noted above, statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC's latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in the Company's Annual Report on Form 10-K available from the Company at P.O. Box 1148, Zephyr Cove, NV 89448(attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC's website at www.sec.gov.

Safe Harbor

Statements about the Company's future expectations and all other statements in this press release other than historical facts, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby.

The above information contains information relating to the Company that is based on the beliefs of the Company and/or its management as well as assumptions made by and information currently available to the Company or its management. The company does not undertake any responsibility to update the forward-looking statements contained in this release.

Contact Information

  • Contact:

    Surety Financial Group
    410-833-0078