Paxton Energy, Inc., an energy turnaround company engaged in the acquisition, exploration, development and drilling of oil and natural gas properties, announced that on Friday, May 6, 2011, Paxton closed on the agreement with Montecito Offshore, LLC ("Montecito") of Louisiana, whereby Paxton acquired a 70% working interest in 546.875 acres in the Vermilion 179 (VM 179) track for $1,500,000 cash, a $500,000 subordinated note and the issuance of 15 million shares of Paxton common stock.
Located in the shallow waters of the Gulf of Mexico offshore from Louisiana, VM 179 is adjacent to Exxon's VM 164 #A9 well. Based on the Montecito Independent Reserve report by James E. Hubbard, dated March 29, 2010, Proven and Probable reserves have a PV-10 value of $92,000,000 at $85 per barrel oil and $4 per mcf gas.
"The Vermilion 179 acquisition follows the company's strategy of acquiring producing properties with proved and probable reserves," said Charles F. Volk, Jr., Chairman of Paxton.
Paxton engages in the acquisition, exploration, development and drilling of oil and natural gas properties. Paxton is an energy turnaround company whose strategy is to acquire cash flow producing properties with proved and probable reserves, develop the fields by reworking existing wells and drilling new wells. Paxton was founded in 2004 and is based in Stateline, Nevada.
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