SOURCE: Victory Energy Corporation

Victory Energy Corporation

April 25, 2011 11:30 ET

Victory Energy Corporation Acquires Interest in Alwan West Natural Gas Prospect

8.75 BCF Reservoir Potential Represents Largest Natural Gas Prospect Acquisition for Victory

NEWPORT BEACH, CA--(Marketwire - Apr 25, 2011) - As part of its continuing corporate rebuilding strategy, Victory Energy Corporation (PINKSHEETS: VYEY), through its partnership with Aurora Energy Partners, today announced the acquisition of a working interest in the Alwan West natural gas prospect.

The Alwan West prospect will be the largest natural gas well drilled by Victory Energy to date. This prospect's potential reservoir covers an area of 175 acres. It has a reserve potential of 8.75 billion cubic feet (BCF) of natural gas and 43.75 thousand barrels of gas condensate. The reserve potential is based on 50 feet of reservoir sand, one million cubic feet per acre-foot of natural gas and five barrels per million cubic feet of gas condensate. These reserve estimates are for the first Yegua sand only, which is the primary objective, and do not include potential in the secondary objectives.

The Alwan West prospect is located in far western Wharton County, Texas, near the Jackson County line. There are two natural gas lines that cross the lease within 1,000 feet of the proposed location. Victory Energy acquired the prospect, which includes a 5 percent working interest (WI) and a 3.8 percent net revenue interest (NRI), from Miramar Petroleum, Inc. of Corpus Christi, Texas, who will be the operator and who also owns a significant working interest in the well. The well is anticipated to spud in early June of this year.

This area produces from the Frio and Yegua (Oligocene) formations. The lease area is surrounded on all sides by gas condensate production. The first Yegua sand is the primary objective. Secondary objectives are the Frio and second Yegua sand. Alwan West lies on strike between two Yegua fields, Lost Fork (one mile west) and AVO Grande (3,000 feet east). Lost Fork has produced over 42 BCF, while AVO Grande has produced 7 BCF of natural gas. Both of these fields are stratigraphic traps, as is the Alwan West prospect.

Robert Miranda, Victory Energy's chairman and CEO, stated, "This prospect represents our largest gas play to date and it has the potential to deliver a stable and predictable gas flow to the company. Unlike many other gas sands, the Yegua sand is known for its consistent production and very low annual decline rates. This well is supported by both significant nearby production and quality seismic data."

About Victory Energy Corporation
Victory Energy Corporation is engaged in the exploration, acquisition, development, and exploitation of oil and gas properties. The company endeavors to utilize its broad range of oil and gas industry relationships to acquire small interests in a large volume of low- to moderate-risk oil and gas prospects. A cornerstone of this strategy is an emphasis on developing and maintaining relationships with proven, well established oil and gas exploration and development companies.

Prospect acquisitions are ideally weighted toward oil, although natural gas projects with high btu content, favorable above-market pricing and modest decline rates will also be targeted. Targeted prospects generally provide the company with a rapid return of capital while offering multiple well locations for additional drilling on an established trend. The model asset portfolio is geologically and geographically diversified. The company's current producing oil and gas assets are located in the United States.

For more information, please visit our website http://www.vyey.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
There are forward-looking statements contained in this news release. They use such words as "intend," "will," "may," "expect," "believe," "plan," or other similar terminology. These statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results to be materially different than those expressed or implied in such statements. These factors include, but are not limited to: risks associated with the implementation of the Company's strategic growth plan; legislation and government regulation including the ability to obtain satisfactory regulatory approvals; conditions beyond the Company's control such as weather, natural disasters, disease outbreaks, epidemics or pandemics impacting the Company's customer base or acts of war or terrorism; availability and cost of materials and labor; demand for natural gas; cost and availability of capital; competition; the Company's overall marketing, operational and financial performance; economic and political conditions; the continued service of the Company's executive officer; adverse developments in and increased or unforeseen legal costs related to the Company's litigation; the success of the Company's strategic partnerships and joint venture relationships; the Company's ability to pay certain debts; adoption of new, or changes in, accounting policies and practices; adverse court rulings; results of other litigation in which the company is involved; and other factors discussed from time to time in the Company's news releases, public statements and/or filings with the Securities and Exchange Commission. Forward-looking information is provided by Victory Energy Corporation pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. In addition, the Company disclaims any intent or obligation to update these forward-looking statements.

Contact Information

  • CONTACT:

    Robert J. Miranda
    Chairman and Chief Executive Officer
    714.480.0305

    Investor Relations
    714.227.0391