Contact Information: Contact: Wayne Hall Chief Executive Officer (713) 968-9282 Don Kirkendall President (713) 968-9290
Petro Resources Announces Letter of Intent on Williston Basin Acquisition
| Source: Petro Resources Corporation
HOUSTON, TX -- (MARKET WIRE) -- November 14, 2006 -- Petro Resources Corporation (the "Company")
(AMEX : PRC ), a diversified exploration and production company, announced
today that it has entered into a letter of intent with an undisclosed
private company (the "Seller") for the acquisition of an interest in 15
fields located in the Williston Basin in North Dakota. The properties
consist of approximately 15,000 acres and 150 wells which are currently
producing approximately 520 barrels of oil per day net to the Seller's
interest. The Company will acquire fifty percent (50%) of the interest
currently owned by the Seller in the wells and acreage. The parties intend
for the transaction to close, assuming satisfaction of certain conditions,
on or before December 31, 2006.
The fields are secondary recovery water flood re-pressurization candidates
and the parties plan to conduct re-pressurization and subsequent horizontal
drilling operations to increase the production rates. Based on analog data
and engineering studies, this acquisition could add as much as 9 million
barrels of oil reserves net to the Company. The Seller is currently, and
will remain, the operator of the properties.
As consideration for the interest, the Company will pay the Seller in cash
and common stock. In addition, the Company will be required to contribute
development capital towards 100% of the mutually agreed-upon joint capital
costs of the existing secondary recovery and development program and in
other joint participations over a three-year period. For a period of
thirty-six months from the closing, the Seller will guarantee that the
Company's share of gross production revenue from the property shall be not
less than the financial equivalent of 300 net barrels of oil per day.
The consummation of the transaction is subject to certain closing
conditions, including the negotiation and execution of mutually agreeable
definitive agreements, the Company's independent confirmation of reserves,
production and operating expenses associated with the property and the
Company's acquisition of $60 million of financing. The Company is in
discussions with certain financing sources for the provision of $60 million
of financing; however, as of the date of this release there are no
agreements or understandings on the part of anyone to provide the required
financing to the Company.
For additional information, please view our website at
www.petroresourcescorp.com.
About Petro Resources Corporation
Petro Resources Corporation is an independent exploration and production
company focused on domestic lease acquisitions, exploration, and oil and
gas production.
Forward-Looking Statements
The statements contained in this press release that are not historical are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including statements, without limitation, regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. Such
forward-looking statements relate to, among other things: (1) the Company's
acquisition of the 50% interest in the 15 fields located in the Williston
Basin in North Dakota; (2) the expected production and revenue from the
Williston properties; and (3) estimates regarding the increase in reserve
potential of the Williston property; and (4) regulation of the Company's
industries and markets. These statements are qualified by important factors
that could cause the Company's actual results to differ materially from
those reflected by the forward-looking statements. Such factors include but
are not limited to: (1) the Company's ability to acquire the $60 million of
financing required under the letter of intent; (2) the Company's ability to
negotiate and execute mutually agreeable definitive agreements; (3)
positive confirmation of the reserves, production and operating expenses
associated with the Williston properties; and (4) the general risks
associated with oil and gas exploration and development, including those
risks and factors described from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission,
including, but not limited to the Company's Pre-Effective Amendment No.2 to
its Registration Statement on Form SB-2 Form filed with the SEC on July 14,
2006. The Company cautions readers not to place undue reliance on any
forward-looking statements. The Company does not undertake, and
specifically disclaims any obligation, to update or revise such statements
to reflect new circumstances or unanticipated events as they occur.