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Press Release - EnerJex Resources, Inc. (EJXR-OTC: BB) |
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“As of a couple years ago, the state of Kansas was the fifth largest oil producer in the country, yet there are 23,000 independent producers of which 5,000 account for 30% of the production. It is a very fragmented business and in the instance of this part of the country, you had folks who have 500 to 10,000 acres, and have only drilled a few wells. Therefore, it is primarily the local landowners who have made money over the years... - Steve Cochennet (EJXR) (Interview published October 26, 2007) |
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ENERJEX REPORTS
THAT PROVED PV 10 VALUE OF ITS RESERVES OVERLAND PARK, KAN. (June 3, 2008) – EnerJex Resources, Inc. (OTCBB: EJXR) today announced that its estimated pretax future net income discounted at 10% (commonly known as PV 10) of proved reserves as of March 31, 2008 increased to $39.6 million from $30.9 million as of December 31, 2007, reflecting an increase in excess of 28% over the three month period.
EnerJex total net proved reserves increased from 1.2 million barrels
of oil equivalent (BOE) to 1.4 million BOE over the same three month
period. Total net proved reserves were made up of 64% proved
developed and 36% proved undeveloped. The proved developed reserves
were made up of 82% proved developed producing and 18% proved
developed non-producing reserves. The March 31, 2008 PV10 valuation of 1.4 million (BOE) was based on an oil price of $94.53 per barrel and $7.479 per million cubic feet (Mcf) for natural gas. This compares to 1.2 million BOE at December 31, 2007 using prices of $84.25 per barrel for oil and $5.657 per Mcf for natural gas. The report was prepared by McCune Engineering, an independent licensed petroleum engineering firm based in Kansas . It encompasses EnerJex’s oil and natural gas development projects in Eastern Kansas .
Summary of Proved Oil and Natural Gas Reserves as of March 31, 2008 (1)
*BOE = barrels of oil equivalent (with 6 Mcf of natural gas = 1 barrel of oil)
(1) For a reconciliation to the comparable GAAP financial measure, see “About PV10 Values,” below. (2) Gross BOE represents BOE of all revenue interest owners. (3) Net BOE represents BOE at EnerJex’s net revenue interest.
Proved Oil and Natural Gas Reserves by Project as of March 31, 2008
Black Oaks Project:
DD Energy Project:
Thoren Project:
Tri-County Project:
Gas City Project:
*STB = one stock-tank barrel
EnerJex began its development and drilling program in April 2007 with zero reserves. Mr. Cochennet summarized, “In less than one year we have added over $39.6 million in proved PV 10 value with less than $12 million of debt and we still have in excess of 400 additional drillable locations on current acreage under lease.”
About EnerJex Resources, Inc. EnerJex is an oil and natural gas acquisition, exploration and development company. EnerJex’s principal strategy is to focus on the acquisition of oil and natural gas mineral leases that have existing production and cash flow. Once acquired, EnerJex implements an accelerated development program utilizing capital resources, a regional operating focus, an experienced management and technical team, and enhanced recovery technologies to attempt to increase production and increase returns for its stockholders. EnerJex’s oil and natural gas acquisition and development activities are currently focused in Eastern Kansas .
Forward Looking Statements The statements in this press release regarding any implied or perceived benefits from existing oil and gas field properties, actual proven reserves and revenues to be derived from the reserves, plans to drill additional oil and gas wells, anticipated revenues, the acquisition of additional oil or gas leases, maintaining mineral lease rights, and any other effects resulting from any of the above are forward-looking statements. Such statements involve risks and uncertainties, including, but not limited to, the continued production of oil and gas at historical rates, costs of operations, delays, and any other difficulties related to producing oil or gas, continued maintenance of the oil field and properties, price of oil or gas, marketing and sales of produced oil and gas, estimates made in evaluating proven reserves, risks and effects of legal and administrative proceedings and governmental regulation, future financial and operational results, competition, general economic conditions, and the ability to manage and continue growth.
The reserve values stated in the McCune report are estimates and should not be interpreted as being exact quantities. They may or may not be actually recovered and the revenues stated in the report may be more or less than what will ultimately be recovered. While the reserve estimates presented in the report were believed reasonable at March 31, 2008, several factors may lead to a future revision of the reserve estimates presented in the report, including general economics, EnerJex’s operations and reservoir performance.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual outcomes may
vary materially from those indicated. Important factors that could
cause actual results to differ materially from the forward-looking
statements EnerJex makes in this news release include market
conditions and those set forth in reports or documents it files from
time to time with the SEC. EnerJex undertakes no obligation to
revise or update such statements to reflect current events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. Cautionary Note to U.S. Investors The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves as defined in Rule 4-10(a) of Regulation S-X. EnerJex uses certain terms herein, such as probable reserves, which the SEC’s guidelines strictly prohibit EnerJex from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in EnerJex’s Form 10-KSB, File No. 000-30234, available from EnerJex at 7300 W. 110th, 7th Floor, Overland Park, Kansas 66210. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC’s website at www.sec.gov.
About PV 10 Values: PV 10 value means the estimated future gross revenue to be generated from the production of proved reserves, net of estimated production and future development and abandonment costs, using prices and costs in effect at the determination date, before income taxes, and without giving effect to non-property related expenses, discounted to a present value using an annual discount rate of 10% in accordance with the guidelines of the SEC. PV 10 is a non-GAAP financial measure and generally differs from the standardized measure of discounted future net cash flows, the most directly comparable GAAP financial measure, because it does not include the effects of income taxes on future net revenues.
# # #
For further
information contact: OR Dede Jones, Director of Finance 913-693-4600 or djones@enerjexresources.com
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