CARSON CITY, Nev., May 24, 2005 (PRIMEZONE) -- Friendly Energy Corporation (Pink Sheets:FDEG): The company's board of directors announced today that the company has entered into an option agreement to participate with American Stellar Energy, Inc. (Pink Sheets:AMRS), and Koko Petroleum, Inc. (Pink Sheets:KKPT) in the exploration and production of Corsicana Field.
AMRS and KKPT has heretofore obtained from Texas M.O.R. ("TMOR") previously Spartan General Partners, a Farm-out of 1,000 acres of held-by-production leases (the "Farmout") with the right to drill and earn an undivided ninety percent (90%) interest in the Farmout lands, carrying TMOR for a 10% interest in each well.
Upon the receipt of payment the JV Partners shall assign to FDEG an undivided 63% working interest (70% of the 90% earned in the original Farmout Agreement) in and to said leases, delivering a 41.95% net revenue interest in each lease based on a combined JV Partner Working Interest of 90%, delivering a Net Revenue Interest of 66%, proportionately reduced. FDEG shall own an undivided 63% Working Interest in each well drilled until Payout. At Payout of each well Working Interest ownership shall change in that Well to represent Working Interests which will then be 45% (50% of the JV Partners 90%) held by FDEG and 45% held by the JV Partners, proportionately reduced, delivering an equal 33.3% Net Revenue Interest to each.
This represents an opportunity for the company to begin executing its operational plan of acquiring low risk, low cost drilling targets with the highest possible opportunity for success. This joint venture provides for the company to drill up to a thirty well program on ten acre target spacings over the next twelve months. "Friendly Energy is pleased to enter into this joint venture agreement for the further development of this already proven producing field," states Friendly Energy Inc's President Doug Tallant. "We are encouraged by our Joint Venture partner's previous success in drilling this field earlier this year to the Pecan Gap Zone. We look forward similar results in our anticipated thirty well program."
Friendly Energy Corporation is a development company involved in exploration of low risk oil and gas properties in the United States.
This news release contains information that is ``forward-looking'' in that it describes events and conditions, which Friendly Energy Corporation (``FDEG'') reasonably expects to occur in the future. Expectations for the future performance of the business of FDEG are dependent upon a number of factors, and there can be no assurance that FDEG will achieve the results as contemplated herein and there can be no assurance that FDEG will be able to conduct its operations or production from its properties will result from or continue as contemplated herein. Certain statements contained in this report using the terms ``may,'' ``expects to,'' and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond the Company's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. FDEG disclaims any obligation to update any forward-looking statement made herein.