MIDLAND, Texas, Sept. 13, 2010 (GLOBE NEWSWIRE) -- Doral Energy Corp. (OTCBB:DRLY) ("Doral" or "the Company"), announced today that it has entered into a Letter of Intent to combine with Pure Gas Partners II, L.P ("Pure"). of San Antonio, Texas. This business combination which will be effected through the issuance of common shares of Doral Energy, will result in an effective change of control with current stakeholders of Pure owning eighty percent (80%) of the combined entity post-transaction. Pure is a Limited Partnership with interests in approximately 600,000 gross acres located within the state of New Mexico. Net Acreage consists of approximately 300,000 net acres with approximately 30,000 net acres located within the Permian Basin of Southeastern New Mexico. Ninety eight percent (98%) of all acreage is held by production (HBP) with the largest percentage being Fee Mineral. Pure owns varying operated and non-operated working interests, ranging from 1% - 50%, in approximately 75 gross wells located within Eddy, Lea, and Chaves Counties, New Mexico with net current production of approximately 230 BOEPD. Pure's significant operating partners include Mariner Energy, Inc. (soon to be Apache), Concho Resources, Mewbourne, Devon and Cimerax. As part of this business combination, Doral will, among other things, conduct a reverse stock split and name change. The combined entity will have its corporate headquarters in San Antonio, Texas while maintaining an operations office in Midland, Texas. Doral's current Senior Management, Mr. E. Will Gray II will remain Chairman and CEO while Mr. Larry Risley, of Pure will move into the role of President and COO.
Management Comments
E. Will Gray II, Chairman and CEO of Doral Energy, stated, "We believe that this transaction positions Doral to truly recognize its intrinsic shareholder value. We believe that the addition of approximately $42,000,000 in assets will create a platform that will allow several goals to be achieved, including listing on a major exchange, easier access to capital both debt and equity and being positioned to command greater analyst and institutional investor attention." Mr. Gray further stated, "We would like to thank the management of Pure for their diligent efforts to bring this transaction to this stage. While we still have to undertake several steps to conclude the transaction, we remain confident that this transaction should close before the end of 2010."
Larry Risley, President of Pure added that, "We are excited about the opportunity that the combination with Doral brings and believe that this transaction will allow the combined company to exploit the value of Pure's and Doral's interests. We believe this transaction provides an excellent opportunity for our stakeholders and look forward to working towards a closing by the end of the year."
Doral Energy will be hosting a conference call in the next several weeks to discuss this transaction. Information will be provided once it has been scheduled.
C. K. Cooper & Company of Irvine, California is acting financial advisor to Doral on this transaction.
Alexander G. Montano, Managing Director for C. K. Cooper & Company commented, "Pure is well positioned in the exciting Bone Springs Sand play currently heating up in New Mexico. We believe that the combination of these two entities, resulting in a much larger over-all Company should serve shareholders of both entities well. We believe that this transaction be the first step of several to enhance shareholder value over the next several years."
About Doral Energy Corp.
Doral Energy Corp. (OTCBB:DRLY) is an oil and gas exploitation and production company headquartered in Midland, Texas. Doral Energy Corp.'s strategy is to grow a portfolio of under-developed production and exploitation assets with the potential for generating near-term increases in existing production through operational improvements, and longer-term development of proved undeveloped reserves by infill drilling. Doral focuses on identifying acquisitions that generate immediate cash flow from production, but which also have strong proved developed non-producing and proved undeveloped reserves that can be tapped for significant growth. The prolific Permian Basin of Texas and New Mexico is the geographic region of focus for the Company's future acquisition activity. Shareholders and investors are encouraged to visit Doral Energy's interim website at www.DoralEnergyCorp.com/">www.DoralEnergyCorp.com for more information.
Forward Looking Statements
This news release contains forward-looking statements that are not historical facts and are subject to risks and uncertainties. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined, and assumptions of management. Forward looking statements are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "aims", "potential", "goal", "objective", "prospective", and similar expressions or that events or conditions "will", "would", "may", "can", "could" or "should" occur. Information concerning oil or natural gas reserve estimates may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a project is actually developed. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include misinterpretation of data, inaccurate estimates of oil and natural gas reserves, the uncertainty of the requirements demanded by environmental agencies, the Company's ability to raise financing for operations, breach by parties with whom the Company has contracted, inability to maintain qualified employees or consultants because of compensation or other issues, competition for equipment, inability to obtain drilling permits, potential delays or obstacles in drilling operations and interpreting data, the likelihood that no commercial quantities of oil or gas are found or recoverable, and our ability to participate in the exploration of, and successful completion of development programs on all aforementioned prospects and leases. Additional information on risks for the Company can be found in the Company's filings with the U.S. Securities and Exchange Commission.