SAN FRANCISCO, CA — (Marketwire) — 05/08/12 — Worthington Energy, Inc. (OTCBB: WGAS) (“Worthington”), an energy turnaround company engaged in the acquisition, exploration, development and drilling of oil and natural gas properties, takes this opportunity to provide a recap of the Company–s recent activities.
“This past year has been a very busy year for Worthington Energy,” stated President and CEO, Anthony (Tony) Mason. “Below is a brief listing of the acquisitions we have accomplished, plus an update on other activities with which we have been involved.”
On May 6, 2011, Worthington (formerly Paxton Energy, Inc.) closed on the agreement with Montecito Offshore, LLC (“Montecito”) of Louisiana, whereby Paxton acquired a 70% working interest in 546.875 acres in the Vermilion 179 (VM 179) track. Located in the shallow waters of the Gulf of Mexico offshore from Louisiana, VM 179 is adjacent to Exxon–s VM 164 #A9 well. Based on the Montecito Independent Reserve report by James E. Hubbard, dated March 29, 2010, Proven and Probable reserves have a PV-10 (present value at a discount rate of 10%) value of $92,000,000 at $85 per barrel oil and $4 per mcf gas.
On October 25, 2011, the Company entered into a definitive agreement to acquire a 50% Working Interest in the Redwater/Maud Lease, consisting of 1,462 acres in Bowie County, TX, from Black Sands Energy, LLC (“Black Sands”) of Richardson, TX. There are seven wells on the Redwater/Maud property, of which three wells are currently producing. Phase I of the Recompletion/Rework development plan will result in all seven wells being on-line and producing. The rework project is expected to increase output from approximately 45 BOPD (barrels of oil per day) to over 400 BOPD and 425 MCFPD (thousands of feet of gas per day) to over 2,300 MCFPD. At least six undeveloped locations remain within the property with the potential for a Phase II plan that will explore additional well drilling locations.
On November 14, 2011, the Company entered into a definitive acquisition agreement to acquire a 2% Override Interest in the entire Mustang Island 818-L Lease, covering 14,400 acres in the Gulf of Mexico, with a 10.35% Working Interest in the recently drilled I-1 well, located on the lease, from Black Cat Exploration & Production, LLC (“Black Cat”), a Texas limited liability company.
At the request of Worthington Energy, James E. Hubbard prepared an updated reserve and economic evaluation of Worthington–s VM 179 lease located in the Gulf of Mexico, offshore Louisiana as of January 1, 2012. Worthington currently owns a 70% Leasehold Working Interest in VM 179, with a Net Revenue Interest of 51.975%. The updated reserve report shows the net total for all reserves with a Projected Future Net Revenue of $97.7 million at $85 per barrel oil and $4 per mcf gas.
On March 7, 2012, the Company completed the Black Cat Exploration & Production, LLC (“Black Cat”) acquisition, previously announced on November 14, 2011
Effective April 19, 2012, the Company entered into a definitive purchase agreement with D Bar Leasing (“D Bar”), based in Abilene, TX, with respect to the sale and development of leases, wells, and other assets relating to certain mineral properties in Taylor, Eastland, and Callahan Counties, TX. The Parties intend to close the contemplated transaction in two phases.
The first phase (the “Lease Assignment”) was completed April 20, 2012 and involved the conveyance of the 6.25% Working Interest in the Alvey Leases (478.5 Acres, 33 well bores, Callahan County Texas) from D Bar to Worthington for payment of $100,000 in connection with the execution of the Lease Assignment.
The second phase (the “Development Agreement”) was executed April 26, 2012 and involves the conveyance of 87.5% of the Working Interest in the Alvey Leases, 95% of the Working Interest in the Boyett Leases (480 Acres, 14 well bores in Callahan County, Texas) and 95% Working Interest in the Burham Leases (240 Acres, 7 wells, Taylor County, Texas) wells from D Bar and or assignees to Worthington D Bar will retain a 15% carried interest in each well conveyed to Worthington. The closing of phase two is anticipated to occur within 45 days.
On April 24, 2012, the Company announced the launch of its new website, . The site features news about the Company, including pictures and descriptions of our current acquisitions. It also includes a comprehensive Investor Relations section providing current stock quotes, recent news and press releases, which provides Worthington with an opportunity to showcase its holdings, production and growth in addition to providing shareholders and potential investors with a platform for current information about the Company.
Effective April 26, 2012, as per terms of the “Black Cat” acquisition closing, Mr. Anthony (Tony) Mason was named President and Chief Executive Officer of Worthington Energy, Inc.
“We look forward to providing periodic updates on these and other subsequent acquisitions and Company developments as they occur,” concluded Mr. Mason.
Worthington (f/k/a Paxton Energy, Inc.) engages in the acquisition, exploration, development and drilling of oil and natural gas properties. Worthington is an energy turnaround company whose strategy is to acquire cash flow producing properties with proved and probable reserves, develop the fields by reworking existing wells and drilling new wells. Worthington was founded in 2004 and is based in San Francisco, CA. More information can be found on Worthington Energy, Inc. by visiting the company–s website at .
Effective January 1, 2010, the United States Securities and Exchange Commission (SEC) now permits oil and gas companies, in their filings with the SEC, to disclose not only “proved” reserves (i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also “probable” reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as “possible” reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). As noted above, statements of reserves are only estimates and may not correspond to the ultimate quantities of oil and gas recovered. Any reserve estimates provided in this press release that are not specifically designated as being estimates of proved reserves may include estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC–s latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in Worthington–s Annual Report on Form 10-K available from 220 Montgomery Street #1094, San Francisco, CA, 94104 (Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330 or from the SEC–s website at .
Statements about Worthington–s future expectations and all other statements in this press release other than historical facts, are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. Worthington intends that such forward-looking statements be subject to the safe harbors created thereby. The above information contains information relating to Worthington that is based on the beliefs of Worthington and/or its management as well as assumptions made by and information currently available to Worthington or its management. Worthington does not undertake any responsibility to update the forward-looking statements contained in this release.
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