Pilgrim Expands Presence in Palo Duro Basin

Pilgrim Petroleum has signed a Letter of Intent to acquire a 100% working interest in 1,395 acres on Archer and Wilbarger Counties in Texas. This property has a history of great production and has existing well bores available for reentry.

The Palo Duro Basin is located in the Texas Panhandle district and is bound on the north by the Amarillo-Wichita Uplift in Oklahoma, to the south by the Matador Arch-Permian Basin in West Texas. The Palo Duro Basin prospect, which is currently being evaluated for further development, has been compared to the Barnett Shale discovery. Barnett Shale is estimated to contain some 30 trillion cubic feet of natural gas. Management believes Palo Duro could prove to be one of the largest natural gas deposits in North America.

Rafael Pinedo, Pilgrim Petroleum CEO-President, said, "Each acquisition builds our natural energy reserve base. We will continue to acquire properties and bring our wells on line through out 2007 in order to increase our residual revenue." Currently, Pilgrim Petroleum has modest levels of production from this area and will start to use enhanced oil recovery techniques to boost additional production levels in the area.

Pilgrim Petroleum is an independent oil and gas company based in Irving, Texas. The company is acquiring oil and gas leases, producing properties, mineral rights, and surface interests primary on marginal fields. Once acquired, the company intends to redevelop each property to maximize the income from each property by refurbishing and improving the existing production.