SAN ANTONIO, Texas, June 17, 2002 (PRIMEZONE) -- American Energy Partners Inc. (OTCBB:AMEP) today announced that the Company has signed a Letter of Intent with Texas oil operator Proco Operating Co. Inc. to purchase all oil and gas leases and related oil field equipment for stock and notes to be negotiated in the final sales agreement. These oil and gas leases cover 3,000-plus acres and have a long history of production from several producing horizons. Proco Operating Co. Inc. will become a wholly owned subsidiary of American Energy Partners Inc. The Marble Falls formation on the property still contains proven oil reserves of 2,400,000 barrels and 3 billion cubic feet of natural gas.
Recently, west of Ft. Worth, Texas in Wise County, Mitchell Energy discovered natural gas in the Barnett Shale formation. Mitchell Energy, with grants from the Department of Energy, designed a stimulation procedure that pumps thousands of gallons of water under pressure at a pumping rate of 100 barrels of water per minute. This stimulation fracture props open the Barnett Shale formation to deliver tremendous volumes of natural gas into the natural gas transportation pipelines. Because of this natural gas discovery, 20-30 drilling rigs are drilling at all times in this region.
The oil and gas lease, which is the subject of the Letter of Intent signed by American Energy Partners Inc., has a blanket Barnett Shale formation about 150 feet thick. One of the first projects American Energy Partners Inc. will undertake will be to fracture stimulate one of the existing oil or gas wells in the Barnett Shale formation. The Company's success in a re-completion of an existing well in the Barnett Shale formation will add substantial natural gas reserves to the American Energy Partners Inc. assets.
Statements contained in this release, which are not historical facts, may be considered "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. forward-looking statements are based on current expectations and the current economic environment. We caution the reader that such forward-looking statements are not guarantees of the future performance. Unknown risk, uncertainties as well as other uncontrollable or unknown factors could cause actual results to materially differ from the results performance, or expectations expressed or implied by such forward-looking statements.