TRAVERSE CITY, Mich., May 17, 2006 (PRIMEZONE) -- Cadence Resources Corporation (OTCBB:CDNR) today reported signing a 'Letter of Intent' to acquire all leases, wells, facilities and production associated with two producing projects in northern Michigan. This adds approximately 5,000 acres of mineral rights, 11 producing wells, and over 500 Mcf of daily production to the Company's portfolio. Management also estimates proven reserves in excess of 10 Bcf associated with the acquisition. Due diligence is underway and expected to be complete for an agreement effective date of June 1, 2006.
Thomas Tucker, Vice President of Operations commented, "This acquisition fits nicely with our Antrim Shale production portfolio. Operationally, we immediately add reserves and undeveloped acreage. Financially, we add revenues from flowing gas. The best part of this deal, however, is two-fold. First, drilling permits are already in hand or in process. Second, the pipeline and processing infrastructure, which includes over 5 miles of sales pipeline, is already complete."
In addition to this acquisition, two new project areas in the Antrim Shale were put into production this month. The Black Bear Central and Arrowhead Antrim Units went on-line May 9th and May 11th, respectively, and are currently in the dewatering phase. Between the 2 projects, 12 wells are producing and 22 will be put into production in the near future. An additional 8,000 acres are left to be developed. Initial production results are encouraging and reserves can be reclassified as proven from probable.
With the above-mentioned acquisition and the addition of the Black Bear and Arrowhead production, the Company expects to easily hit the mid-year projection of 100 Bcf in proven reserves.
About Cadence Resources:
Cadence Resources is an independent energy company focused on unconventional natural gas exploration, acquisition, development and production with its main operations in the Michigan Antrim Shale and Indiana New Albany Shale.
Statements regarding estimates of proven reserves, anticipated drilling on the acquired acreage and our plans for the future growth are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although we believe that the drilling and acquisition plans described are based on reasonable assumptions, we can give no assurance that they will prove accurate. Important factors that could cause our actual results to differ materially from those included in the forward-looking statements include the timing and extent of changes in commodity prices for oil and gas, drilling and operating risks, the availability of drilling rigs, changes in laws or government regulations, unforeseen engineering and mechanical or technological difficulties in drilling the wells, operating hazards, weather-related delays, the loss of existing credit facilities, availability of capital, and other risks more fully described in our filings with the Securities and Exchange Commission. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.