IGPG News Ignis Petroleum Group, Inc., To Purchase Interests in Barnett Shale Acreage, Producing Wells, Development Program and Gas Gathering & Treating System
DALLAS--(BUSINESS WIRE)--Ignis Petroleum Group, Inc. (OTCBB:IGPG), an oil and gas company with
operations focused on the acquisition, exploration and development of
crude oil and natural gas positions in the onshore U. S. Gulf Coast and
Mid-Continent areas, today announced that it has agreed to acquire 45%
of the acreage, producing properties and natural gas gathering and
treating system currently held by W. B. Osborn Oil & Gas Operations,
Ltd. ("WBO") and St. Jo Pipeline Limited within the St. Jo Ridge
(Barnett Shale) Field, located in Montague and Cooke Counties, Texas.
Upon closing, the effective date of the transaction will be June 1,
2006. WBO will remain the operator.
Terms of the purchase were:
Purchase price of $18,450,000, before closing adjustments, to be paid
in cash. The adjustments will be determined from time to time as
production flows and drilling investments are accounted for by the
parties.
As part of the transaction, Ignis will commit to invest capital into
an ongoing continuous drilling program as well as invest up to
$5,000,000 in future property acquisitions within an Area of Mutual
Interest.
The consummation of the agreement is subject to standard closing
conditions. The transaction is scheduled to close on or before October
31, 2006. Ignis is currently negotiating financing for the transaction.
Ignis will be acquiring forty-five percent (45%) of WBO's interests in
7,890 gross acres (6,864 net acres), 13 producing wells, and an
estimated total net proved reserves of 1.4 million barrels of oil
equivalent (Mboe) of which 0.5 Mboe are proved developed producing as of
June 1, 2006. Approximately fifty percent (50%) of the proved reserves
are oil and fifty percent (50%) are a combination of gas and gas
liquids. The gathering and treating system consists of a 100% interest
in approximately 24 miles of gathering lines, which accumulates and
treats natural gas at a central plant. WBO has identified 36 initial
drilling locations on the acreage before beginning the infill drilling
program, which could yield more than 100 additional drilling sites. A
Pioneer Drilling Company rig, secured under a 12-month renewable
contract, is currently being used to carry out the continuous drilling
program.
Michael P. Piazza, Ignis President and Chief Executive Officer said, "We
are pleased to announce this strategic acquisition and development
project as we continue to focus on achieving our long-term growth
targets for shareholders. Our partner in this project, W. B. Osborn Oil
& Gas Operations, a private San Antonio, Texas-based company, has a long
history of developing and producing oil and gas. We believe the Ignis
team will bring additional seasoned expertise and advancements in new
technology to enhance recovery from the project, working alongside our
partner."
About Ignis Petroleum
Ignis Petroleum Group, Inc. is a Dallas-based oil and gas production
company focused on exploration, acquisition and development of crude oil
and natural gas reserves in the United States. The Company's management
has closely aligned itself with strategic industry partnerships and is
building a diversified energy portfolio. It focuses on prospects that
result from new lease opportunities, new technology and new information.
For further information, visit www.ignispetro.com.
Safe Harbor for Forward-Looking Statements
This release contains certain "forward-looking statements" as defined by
the Private Securities Litigation Reform Act of 1995, including, without
limitation, expectations, beliefs, plans and objectives regarding the
potential transactions and ventures discussed in this release. Among the
important factors that could cause actual results to differ materially
from those indicated by such forward-looking statements are the risks
inherent in oil and gas exploration, the need to obtain additional
financing, the availability of needed personnel and equipment for the
future exploration and development, fluctuations in gas prices, and
general economic conditions.
