Here it is.
Coconino Oil & Gas Announces Joint Venture With
Pickens' M3 Group of Dallas, TX
SALT LAKE CITY, Dec. 1 /PRNewswire/ -- Coconino Oil & Gas, Inc. (CO&G), a
wholly-owned subsidiary of Coconino S.M.A., Inc. (OTC Bulletin Board: CSMA - news),
announced that it will enter a joint venture with M3, Inc. of Dallas, Texas to develop a 1,250 acre
natural gas prospect on the Texas gulf coast.
An independent geological evaluation of the property estimates 50-100 billion cubic feet of natural
gas--- valued at $30-80 million--- could be produced from the property. Spacing allowances would
permit the joint venture to drill eight or more new wells.
CO&G has obtained a second engineering evaluation that indicates the presence of 165 feet of
sands with a 20% porosity. These factors are similar to a third-party offset field that has wells from
3,500 feet depths that have produced to-date 2-4 billion cubic feet of gas (BCF) each. M3 has
provided a Schlumberger TDTP cased hole log on an open well bore on the subject acreage that
indicates that the joint-venture property has formations identical to the offset field.
The property was originally drilled for oil by Humble Oil (now Exxon) in the 1950's to depths of
5,300-5,400 feet and has produced in excess of 4 million barrels of oil. However, the natural gas on
the property has not been developed. The acreage currently has one active well producing
approximately 12 bbls per day along with approximately 75 mcf of natural gas.
The terms of the joint venture call for M3 to sell the property to CO&G in return for an undisclosed
amount of Coconino common stock (Restricted under SEC Rule 144). M3 will also receive an
overriding royalty interest and carried working interest in the first well to be drilled on the prospect.
Thereafter, M3 will pay a pro rata share of costs for any additional well sites that may be drilled on
the property. The joint venture agreement is planned to be finalized by January 1, 1998.
''This is the first of what may be a number of joint venture projects with Michael Pickens and M3
group,'' said Derry Moore, president of CO&G, ''We are exploring a number of other oil and gas
opportunities, including the development of the salt water disposal well on the property.''
The regulatory permitting process has been initiated that would give the well a Class II disposal
permit similar to Coconino's Enviro-Tec well in northeastern Utah. CO&G plans to apply for a
Class V permit, which would significantly increase its revenue potential.
Coconino SMA is a diversified company involved in the consumer products and services and natural
resource industries through four subsidiaries: Ad- HaTTeRs manufactures and markets unique air
fresheners in the form of cowboy hats and boots, ski caps, angel replicas, and the newly introduced
''Dream Catcher.'' Coconino Oil & Gas has an interest in a productive oil well in northeastern Utah.
Enviro-Tec owns and operates a class D Type II disposal well, also in northeastern Utah. And LPS,
Ltd. specializes in financial education; debt consolidation and repayment acceleration; and wholesale
mortgage banking.
Safe Harbor Act Disclaimer: This release may contain forward looking statements that involve risks
and uncertainties, including, without limitation, continued acceptance of the company's products and
services, increased levels of competition, new products and technological changes, the company's
dependence upon financing, third-party suppliers and intellectual property rights, and other risks
detailed from time to time in the company's federal filings, annual report, offering memorandum, or
prospectus.
SOURCE: Coconino SMA, Inc. |
