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Wednesday April 22, 9:30 am Eastern Time
Company Press Release
SOURCE: Coconino Oil & Gas
Coconino Oil & Gas Gets Foothold in Huge Oklahoma Gas Field; Progress Reported on Conroe, TX prospect
ROSWELL, N.M., April 22 /PRNewswire/ -- Coconino Oil & Gas, Inc. (CO&G), a wholly-owned subsidiary of Coconino S.M.A., Inc. (OTC Bulletin Board: CSMA - news) reported that it has purchased a small revenue interest in a producing natural gas well located in Latimer County, Oklahoma.
CO&G president, Derry Moore, said, ''This is not a large investment but it is likely to be one that turns significant profits over the years. More importantly for Coconino, and only through connections developed over many years in our business, we are able to begin a relationship with some of our industry's best-known and largest companies in an area that is very active and very productive right now. Joint ventures such as this can become a cornerstone for Coconino Oil and Gas' future.''
Company officials indicate the well's current production is 8,000,000 cubic feet per day or greater measured most recently on April 11th of this year. It is expected to produce for as many as 27 years. CO&G's net revenue interest is very small, requiring an investment of only $45,000, but it is expected to pay out in slightly more than one year based on conservatively projected natural gas prices of $2.10 per mcf. That suggests that the company will receive its investment back again and again over the years. ''It's little investments like this one that can provide solid portfolio returns translating to bottom line earnings for the company and its shareholders,'' said Moore.
Moore also noted that current natural gas prices exceed the levels used for his payout projections and are expected by the industry to increase even further as the colder fall and winter seasons approach. According to published industry statistics, natural gas commanded a price of up to $3.80 per mcf during those periods last year. If such prices are reached again this year, the payout on CO&G's investment will be shortened considerably resulting in an even higher rate of return to the company.
Coconino's interest in the well of $45,000 was paid for with a cash down payment, a bank loan arranged through First National Bank [OTC BB:FIPG - news] of Chaves County in Roswell, NM, and a small quantity of Rule 144-restricted common stock in CO&G's parent company.
Moore also commented on his company's current reentry attempts on its lease in Conroe, TX. He said, ''We have perforated two zones in an open well bore and plan to test two more zones uphole this week or next. We requested and have received two additional structure maps on the Frio and the Vicksburg sands by a Dallas-based geologist, and our plans are to permit and drill both sands.''
Coconino S.M.A. is a diversified company involved in natural resources development through its Coconino Oil & Gas, Inc. subsidiary located in Roswell, New Mexico, and non-toxic industrial and commercial waste disposal through its Enviro-Tec, Inc. subsidiary with offices in Salt Lake City, Utah and Roswell, New Mexico. The company also offers consumer products and services through subsidiaries Ad-HaTTeRs, Inc. headquartered in Centennial Park, Arizona, and LPS, Ltd., located in Birmingham, Alabama.
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 Oil & Gas
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First National Bank (OTC BB:FIPG - news)
Related News Categories: oil/energy
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