OIL CITY, La., Feb. 2, 2011 (GLOBE NEWSWIRE) -- The management of Black Dragon Resource Companies, Inc. (Pink Sheets:BDGR) is pleased to announce the finalized terms between the Company and the Canadian company Black Dragon Resources, Ltd. (Frankfurt:8BD).
The Company has agreed to sell two oil and gas leases and a 1% overriding royalty interest for cash, a promissory note, and shares in 8BD. One of the sold leases is a non-producing lease, still within its primary term. However, the Company does not currently have the funding to develop the lease to commercially producing levels. The Company will retain a royalty interest in the lease.
Additionally, the Company has agreed to enter into a 8 well drilling program with 8BD and a third partner, with the Company having a 40% working interest in the 8 wells. However, if two wells are drilled and deemed to not be able to produce at commercial levels, and not completed, 8BD will have the right to choose the next well it funds.
As the Company has stated in previous releases, any excess cash deemed by the Board will be used to buy back shares of the Company's outstanding common stock.
Management further announced that production numbers for the month of January should be released by the middle of this month.
Black Dragon is an oil and gas exploration and production company currently focused on the acquisition of mature, producing and existing domestic oil and gas fields. This focus has eliminated exploration risk, reduced costs of completion, and provided rapid generation of income in a niche market where larger independent and major oil companies are not positioned to compete. Black Dragon intends to recomplete additional shallow producing wells and to expand its focus to include drilling of new wells, some to deeper levels and to purchase additional leases.
Forward-Looking Statements - Safe Harbor:
Certain information discussed in this press release may constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company's inability to accurately forecast its operating results; the Company's potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company's business. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
CONTACT: Black Dragon Resource Companies, Inc. Investor Relations (318) 995-0404 bdgroil@bellsouth.net