CAPCO Announces Joint Venture with Hoactzin Partners for Acquisition of Producing Oil and Gas Properties


HOUSTON, May 5, 2005 (PRIMEZONE) -- CAPCO Energy, Inc ("CAPCO") (OTCBB:CGYNE) today announced the consummation of a joint venture with Hoactzin Partners, L.P. ("Hoactzin"), an oil and gas investment affiliate of New York based investment firm Dolphin Asset Management Corp. As part of their arrangement, CAPCO and Hoactzin yesterday acquired rights to 11 producing wells and approximately 13,300 gross acres of land in South Chandeleur Area in the Gulf of Mexico and Louisiana State Waters from Manti Operating Company. The joint venture's working interests in the wells vary from 14% to 100%, with current net production of approximately 13 million cubic feet of gas per day.

The $20.0 Million purchase price for the Louisiana properties was funded by both Hoactzin and CAPCO, and by cash flow credited from production of the acquired properties. CAPCO also contributed to the joint venture arrangement its interests in High Island Block 196 and certain other oil and gas producing properties in exchange for the reduction of approximately $6.4 million of indebtedness to Hoactzin. Under their joint venture arrangement, Hoactzin will own and retain all cash flow from the properties until their investment is returned, and thereafter CAPCO will receive a 66.7% economic interest in the properties. CAPCO will also retain an option to repurchase the properties to be determined by a formula.

CAPCO is an E&P company with offshore and onshore operations in USA, with its head office in Houston, Texas.

The information herein contains forward-looking statements based on assumptions that may prove not to have been accurate. The business activities of CAPCO, as usual to its industry, are subject to many risks both calculable and incalculable. Included in these risks are oil and gas prices, the need to develop replacement reserves, the reliability of reserve estimates, and the feasibility of extracting reserves, environmental risks, drilling and operating risks, and the ability of the Company to implement its business strategy.



            

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