FORT LAUDERDALE, Fla., April 27, 2005 (PRIMEZONE) -- PEXCON, Inc (Pink Sheets:PXCN), an oil and gas exploration and development company, is pleased to announce that the company has purchased its first interest in the Whatley Well.
PEXCON, under the terms of the previously announced agreement with Cherokee Production, has acquired an initial interest in the Well. This interest will generate approximately $85,000 in revenue over a period of five years, inclusive of an offset drilled on this well. PEXCON's revenue projections contained in this release rely on an independent report, completed January 24, 2005, based on a natural gas price of $6.21/mcf at that time. The company believes this acquisition will be the first of many for the Whatley property, culminating in early Q3 2005, and creating recurring revenue of $340,000 yearly until late 2010.
With this transaction, PEXCON has reached "break-even" with regard to fixed costs. Subsequent purchases will result in a positive cash flow and eliminate all debt. With limited overhead, the company will retain a majority of the revenues generated from these working interests as net earnings.
The company is actively exploring other opportunities with Cherokee to develop projects that Cherokee has under lease agreements. The total listed reserves of these leases include approximately 21,250,000 barrels of oil and 1,385,000,000/mcf of natural gas. PEXCON intends to raise capital through private placements and institutional offerings to take advantage of the significant revenue opportunity presented in the Cherokee leases.
The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made on behalf of the company. All such forward-looking statements are, by necessity, only estimates of future results and actual results achieved by PEXCON, Inc. may differ materially from these statements due to a number of factors. PEXCON, Inc. assumes no obligations to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. You should independently investigate and fully understand all risks before making investment decisions.