HANA, Hawaii, June 28, 2005 (PRIMEZONE) -- Maui General Store, Inc. (OTCBB:MAUG) announces that it has signed a letter of intent with Robson Holdings, Inc. of Dallas, Texas. The letter states that Maui General Store and Robson Holdings will negotiate the terms of an agreement under which Maui General Store would acquire certain over-riding royalty interests on approximately 275,000 acres of land in the Palo Duro Basin of Northwest Texas. Robson Holdings, with vast experience in drilling and operating natural gas wells in the area, estimates that up to 2,000 wells can be operational, with drilling set to begin within thirty days. Completion of the agreement will depend on satisfactory negotiation of a purchase agreement, a thorough review of all pertinent land leases, and on Maui General Store's success in obtaining the financing required to purchase the royalty interests.
Highlighted in a March 18, 2005 Morgan Stanley Equity Research report, Texas' Palo Duro Basin has been likened to the renowned Barnett Shale formation located 260 miles Southwest, in both its geological characteristics and resource potential. Unlike Barnett Shale, exploration in the Palo Duro basin is relatively new, with average leasing prices having risen five-fold in the last year as its potential has gathered interest by large industry operators like Vintage Petroleum and Bankers Petroleum. The Morgan Stanley report also notes that pipeline capacity, which can cause bottlenecks in rapidly developing drilling areas, should not be an issue for current exploration in the Palo Duro Basin, as a large regional gas pipeline services the area and currently runs at about 40% of capacity.
Richard Miller, CEO of Maui General Store, maintains that this latest expansion of Maui's energy holdings will increase value for shareholders: "Coupled with our previously announced intentions to acquire operations in the Barnett Shale, these discussions regarding adding an early position in the Palo Duro Basin to our energy stable further solidify our commitment to projects that reduce foreign oil dependence." With crude oil prices reaching and surpassing the $60 per barrel benchmark, Maui General Store continues to aggressively pursue investors to participate in this exciting and lucrative natural gas play.
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The statements made in this press release, which are not historical facts, contain certain forward-looking statements concerning potential developments affecting the business, prospects, financial condition and other aspects of the company to which this release pertains. The actual results of the specific items described in this release, and the company's operations generally, may differ materially from what is projected in such forward-looking statements. Although such statements are based upon the best judgments of management of the company as of the date of this release, significant deviations in magnitude, timing and other factors may result from business risks and uncertainties including, without limitation, the company's dependence on third parties, general market and economic conditions, technical factors, the availability of outside capital, receipt of revenues and other factors, many of which are beyond the control of the company. The company disclaims any obligation to update information contained in any forward-looking statement.