MIDLAND, Texas, Jan. 29, 2010 (GLOBE NEWSWIRE) -- Doral Energy Corp. (OTCBB:DRLY) (“Doral” or “the Company”), announced today that it has, with the approval of its Board of Directors, executed a letter of intent for the sale of fifty percent (50%) of Doral’s interests in its oil and gas assets located in Eddy County, New Mexico to Alamo Resources, LLC (“Alamo Resources”), a private oil and gas company based in Houston, Texas. Total consideration for this transaction could reach $8.875 million, with $5.875 million payable at closing and an additional $3.00 million in incentive payments to Doral over the first 36 months predicated on the achievement of certain project production goals. Doral Energy will retain operatorship of the project. Doral expects to execute definitive binding agreements with Alamo Resources within the next few weeks, with closing anticipated to occur on or before March 1, 2010. Doral and Alamo Resources plan to jointly develop the Eddy County properties, including both the maximizing of production from existing wells and the drilling of infill proved undeveloped locations. Doral also announced that it is in negotiations with Macquarie Bank Limited to further extend the current forbearance, which was set to expire Friday, January 29, 2010, for an unspecified period of time to further accommodate the closing by and between Doral and Alamo Resources. Doral Management has been in constant communication with Macquarie Bank Limited and does not foresee any potential obstacles to receiving such an extension of the current forbearance.
E. Will Gray II, CEO & Vice Chairman of Doral, states, “Management has worked tirelessly these past months to explore numerous financial options such as re-financing, divesting of certain oil and gas assets or even joint venturing with an industry partner in order to satisfy Doral’s outstanding debt obligations to Macquarie. During this decision making process, Management met with numerous energy lenders and potential financial partners. In light of the proposed terms and conditions associated with these options, we chose this route believing it was in the best interest of our shareholders.” Mr. Gray further stated, “This divestiture will allow Doral to pay off all outstanding debt obligations to Macquarie associated with these assets. Additionally, Doral is in discussions with several financial institutions and private equity providers to provide sufficient capital to further develop our remaining oil and gas assets jointly with Alamo Resources and to acquire additional assets. We would like to thank Alamo Resources for their efforts to consummate this transaction and we will continue to update shareholders as to the progress of the closing process.”
C. K. Cooper & Company served as financial advisor to Doral Energy in relation to this transaction.
About Doral Energy Corp.
Doral Energy Corp. (OTCBB:DRLY) is an oil and gas exploitation and production company headquartered in Midland, Texas. Doral Energy Corp.'s strategy is to grow a portfolio of under-developed production and exploitation assets with the potential for generating near-term increases in existing production through operational improvements, and longer-term development of proved undeveloped reserves by infill drilling. Doral focuses on identifying acquisitions that generate immediate cash flow from production, but which also have strong proved developed non-producing and proved undeveloped reserves that can be tapped for significant growth. The prolific Permian Basin of Texas and New Mexico is the geographic region of focus for the Company's future acquisition activity. Shareholders and investors are encouraged to visit Doral Energy's website at www.DoralEnergy.com for more information.
Forward Looking Statements
This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward looking statements are generally, but not always, identified by the words "expects," "plans," "anticipates," "believes," "intends," "estimates," "projects," "aims," "potential," "goal," "objective," "prospective," and similar expressions or that events or conditions "will," "would," "may," "can," "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. In particular, there is no assurance that Doral will be able to re-finance its current credit facility or acquire any future properties.
Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. In addition, the Company has not yet entered into binding agreements with Alamo Resources LLC or Macquarie Bank Limited and there are no assurances that the Company will do so. Additional information on risks for the Company can be found in the Company's filings with the US Securities and Exchange Commission.