SOURCE: Treaty Energy Corporation

January 05, 2010 09:45 ET

Treaty Energy Completes Kansas Oil Lease Agreement

54 Oil and Gas Leases Cover 6,700 Acres With 481 Active Producing Wells

HOUSTON, TX--(Marketwire - January 5, 2010) - Treaty Energy Corporation (OTCBB: TECO) today announced that on December 31, 2009, it completed an agreement to acquire 54 oil and gas leases in Kansas and Missouri. These leases comprise over 6,700 acres and include a total of 481 active producing wells.

Current production has been increased from 115 bbl per day in October 2009, when the original agreement to acquire was signed, to approximately 150 bbl per day. Production from these oilfields is subject to weather conditions and can vary plus or minus 20% during the months of December, January and February. The oil produced from these fields is considered "sweet" and thus brings premium prices in the market.

The Treaty Energy transition team will meet with the previous operators, the company's new operator and petroleum reservoir engineer in mid-January to arrange for an orderly transition to the new Treaty Energy operating team on February 1st. Following the transition, the company expects to increase production on these leases by approximately 20% through aggressive maintenance on the 481 producing wells and by increasing the use of water flooding on areas where this production improvement method has not yet been utilized. Based on the knowledge, experience and expertise of the reservoir engineer and consultants under contract, Treaty Energy expects production will double within 12 to 18 months.

Additionally, now that this initial foundation acquisition has been completed, Treaty Energy plans to expand its Kansas and Missouri holdings by acquiring other leases that run adjacent to the acquired 6,700 acres, thus providing additional production and drilling opportunities, along with increased reserves.

Treaty Energy's CEO, Randall Newton, commented, "Working with the sellers of the Kansas and Missouri leases has been a very positive experience. They've provided a vast wealth of experience and knowledge and we're pleased they've agreed to stay on as consultants to Treaty Energy and our new operations team over the next few years. This consulting agreement will provide us a number of avenues to follow regarding the expansion of acreage and reserves with the goal of increasing production above our estimates from the initial 6,700 acres."

Treaty Energy's President, Joe Grace, commented, "This important acquisition has substantially increased our base and our shareholders can expect to see our company continuing its rapid expansion through a very aggressive acquisition program in the continental United States and abroad."

Mr. Newton added, "I want to extend my thanks to our board of directors, which includes Joe Grace and Dan Olson. It's very rare for an emerging public company to have the quality of board members that Treaty Energy enjoys. The guidance they've given and will continue to give Treaty Energy as it pursues its acquisition strategy is invaluable."

Mr. Newton went on to note that he is very pleased with Treaty Energy's accomplishments in 2009 and that he looks forward to seeing the company grow into a much larger and more profitable oil and gas company in 2010 and beyond.

About Treaty Energy Corporation

Treaty is engaged in the acquisition, development and production of oil and natural gas. Treaty acquires and develops oil and gas leases which have "proven but undeveloped reserves" at the time of acquisition. These properties are not strategic to large exploration-oriented oil and gas companies. This strategy allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration. The company's headquarters are located in Houston, Texas. For more information, please visit our website at:

Forward-Looking Statements:

Statements herein express management's beliefs and expectations regarding future performance and are forward-looking and involve risks and uncertainties, including, but not limited to, raising working capital and securing other financing; responding to competition and rapidly changing technology; and other risks. These risks are detailed in the Company's filings with the Securities and Exchange Commission. Actual results may differ materially from such forward-looking statements.

Contact Information

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