SOURCE: Petro Resources Corporation

November 14, 2006 10:03 ET

Petro Resources Announces Letter of Intent on Williston Basin Acquisition

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.

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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.

Contact Information

  • Contact:

    Wayne Hall
    Chief Executive Officer
    (713) 968-9282

    Don Kirkendall
    (713) 968-9290