TYLER, Texas, March 8, 2010 (GLOBE NEWSWIRE) -- Pegasi Energy Resources Corp. (OTCBB:PGSI), an East Texas based oil and gas exploration and production company headquartered in Tyler Texas today released net oil and gas reserves as of December 31, 2009.
The Company is reporting total net proved reserves of 32.36 BCFE (Billion cubic feet of natural gas equivalent) as of 12/31/ 09 as compared to 33.7 BCFE net proved reserves as of 12/31/08, a drop of only 3.7% after a year's production of natural gas and oil. A six to one ratio of gas to oil is used to equate the BCFE.
All of the reported oil and gas reserves are from the Company's Cornerstone project located in Marion and Cass counties in northeast Texas. The Company has an 80% working interest in the project.
Total gross proved reserves for the Cornerstone project as of 12/31/09 are 40.45 BCFE. Total gross probable reserves for the project are 24.00 BCFE and total possible reserves are 294.75 BCFE. The report was prepared by James Smith and Associates, an independent third party petroleum engineering firm.
The area of the Cornerstone Project has produced over 400 million barrels of oil and more than 2.3 trillion cubic feet of gas. Pegasi is focused on applying new horizontal drilling and multistage frac technology to recover substantial additional reserves which remain in place.
Management Comments
Mr. Michael Neufeld, President and CEO of Pegasi said; "This report certainly demonstrates the viability of Cornerstone as a long term project as well as the foundation for growth for Pegasi Energy Resources. The year 2009 was a challenging year for the industry and we at Pegasi were pleased the total proved reserves has declined less than 4% with minimal capital spending in 2009." Mr. Neufeld went on to say; "We expect to deploy capital in 2010 in order to further develop both the probable and possible reserves."
About Pegasi Energy Resources Corporation
Pegasi Energy Resources Corporation is an organic growth-oriented independent oil and gas exploration and production company, headquartered in Tyler, Texas. Pegasi is focused on a repeatable, low geological risk, high potential project in the active East Texas oil and gas region. The company's strategy is focused on establishing a portfolio of drilling opportunities to exploit undeveloped reserves to grow production, as well as undertaking exploration to grow future reserves. Additional information concerning Pegasi Energy is available at www.pegasienergy.com.
The Pegasi Energy Resources Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4682
Forward Looking Statements
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission ("SEC") permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as probable, possible and potential, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 8-K, filed with the SEC on March 24, 2009, available from us at our principal executive offices at 218 N. Broadway, Suite 204, Tyler Texas 75702. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
The statements in this press release regarding Pegasi Energy's expectations with respect to the timing of testing and drilling operations, transportation of crude oil, and the construction of the pipeline, the ability of Pegasi Energy to plan a full field development, including additional drilling, facilities and pipeline to handle new production as appropriate through 2010, and the expectation as to sources of funding, are 'forward-looking statements' within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934. Although these forward-looking statements reflect the good faith judgment of management, forward-looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed in these forward-looking statements including, but not limited to, in the case of these forward-looking statements: unexpected delays in drilling or pipeline or other transportation infrastructure completion due to equipment failure or other unforeseen reasons; unforeseen events, such as unexpected difficulties in drilling or unexpected discoveries, may cause Pegasi Energy to reallocate resources, which may delay drilling, surveys, design plans, transportation infrastructure development and production or alter the mix of development drilling and exploration drilling in Pegasi Energy's portfolio; and unexpected costs may decrease funds available to carry out Pegasi Energy's plans described in this press release, which could delay or prevent execution of these plans. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Pegasi Energy assumes no obligation to update these forward-looking statements to reflect any event or circumstance that may arise after the date of this release, other than as may be required by applicable law or regulation. Readers are urged to carefully review and consider the various disclosures, including the risk factors, made by Pegasi Energy in its reports filed with the Securities and Exchange Commission, in particular under the caption "Risk Factors" of its 8-K filed on March 24, 2009, which attempt to advise interested parties of the risks and factors that may affect Pegasi Energy's business. If one or more of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, Pegasi Energy's actual results may vary materially from those expected or projected.