Black Dragon to Sell Caddo Lake Rights, Expand Pine Island Drilling
Black Dragon Resource Companies, Inc. said that it has executed an agreement for the sale of the Caddo Lake shallow rights. On December 13, 2006 the Board of Directors unanimously resolved to approve the sale and received approval of the transaction via a consent approval of the majority of the outstanding shares.
Management is pleased with the results of this sale as it has improved the Company's economic position, realizing $1.1 million in cash and elimination of a $2.4 million liability. Barry McFarland, the interim CFO of Black Dragon stated "analysis of the higher costs and operating complexities associated with drilling and maintaining the lake properties indicated that at this time, the Company is better served by focusing on the land based operations. The opportunity to move this asset at a significant profit also contributed to the decision to go forward with this transaction." The Company showed a net gain on the sale of approximately $640K. The proceeds are allowing for the payment of additional short term debt and the redirection of capital to areas with more immediate potential returns. The company is now proceeding with an aggressive drilling program in Hosston and Pine Island.
Black Dragon Resource Companies, Inc. is an oil and gas Production Company focused on the acquisition of mature, producing and existing US oil and gas fields. The Company's focus on mature, domestic oil fields eliminates exploration risk, reducing costs, and provides immediate generation of income in a niche market where larger independent and major oil companies are not positioned to compete.