MIDLAND, Texas, May 20, 2010 (GLOBE NEWSWIRE) -- Doral Energy Corp. (OTCBB:DRLY) ("Doral" or "the Company") announced today that it has entered into a Letter of Intent to acquire 6,800 acres of operated producing oil and gas assets within Southeastern New Mexico for a total purchase price of $1,800,000. The acquisition consists of 15 leases currently producing approximately 54 BOPD (8/8ths) with Working Interests ranging from 37.9%-100% with associated Net Revenues ranging from 32.3%-87.5%. Current production is from the Permian Age, San Andres Formation, which produces at a depth of approximately 4,100 feet. This acreage sits adjacent to other San Andres production and offers Doral the ability to explore the possibility of both down-spacing, to exploit un-drained acreage, as well as to stimulate current producers in order to potentially increase production.
Management expects to enter into a definitive Purchase Sale Agreement on or before June 4, 2010 with an expected closing date of June 30, 2010. Doral intends to utilize a portion of its cash surplus from the closing of its Hanson Energy divestiture to fund this transaction.
Management Comments
E. Will Gray II, Chairman & CEO of Doral, states, "Management is pleased to announce to shareholders the Company's intent to acquire new reserves within the Permian Basin. We will be able to make this transaction with cash on hand, once our current divestiture has closed, and remain initially unleveraged on this acquisition. The ability to have no bank debt with cash on hand will be a strong positive for moving Doral into the next phase of its life-cycle." Mr. Gray further states, "It has been a difficult year for Doral but while many of our competitors were either forced into bankruptcy or foreclosed upon, Management has been able to position Doral from a potentially negative situation into one that remains to be potentially rewarding. It is this optimism that drives Management in its efforts in building an organization that can deliver future positive earnings as well as continue to acquire under-valued producing oil and gas assets within the Permian Basin."
About Doral Energy Corporation
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 close on its divestiture of its Hanson Assets thus negating the possibility of acquiring any future acquisitions.
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. Additional information on risks for the Company can be found in the Company's filings with the US Securities and Exchange Commission.