Based upon current gas prices and production levels on the property, Petrol-Neodesa is expected to generate gross revenues of about $9.6 million for Petrol in 2005. This would result in $0.15 operating cash flow per share based on the number of shares issued and outstanding. In addition Petrol-Neodesa has room for an additional 100 drillable locations and thus the company plans to increase projected revenues through a sustained drilling program in 2005 in order to expand production. Net cash flow after production, operational, interest and other expenses, from Petrol-Neodesa is expected to be roughly $3.5 Million in 2005.
"We are very pleased that Petrol was able to acquire such an attractive producing gas property at about $1.14 per Mcf of proved net reserves, particularly given the robust energy market," said Paul Branagan, Petrol's President and Chief Executive Officer. "We believe that this acquisition dramatically changes the current and future prospects for Petrol Oil and Gas. Producing 3,000,000 cubic feet of gas from Petrol-Neodesa greatly diversifies our revenue streams and compliments our ongoing CBM drilling program just to the north in our Coal Creek Project. With multiple CBM project areas under production we expect to be a much better balanced company and able to provide linkage between all our Cherokee basin CBM properties. In addition cash flow from our Petrol-Neodesa and Coal Creek properties will allow us to continue to invest in our drilling programs, increase production and provide us the opportunity to selectively make additional acquisitions without relying upon external financing."
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