SPOKANE, Wash., Nov. 22, 2004 (PRIMEZONE) -- Monarch Gold Exploration (Pink Sheets:MGEX) announced today that it has signed a letter of intent with Charles Couch of Dallas, Texas to acquire a portfolio of producing oil and gas properties with reserves valued by Couch Oil (www.CouchOil.com) in excess of $10 million ($5 million placed, $5 million being acquired) along with established oil and gas verification methods in exchange for 55 million common shares of Monarch. The net interests in these properties which are being exchanged to Monarch are expected to provide a near term cash flow averaging 2% monthly for the Company as all wells placed in the portfolio are brought on line.
Upon completion of due diligence, and the issuance of the shares, Mr. Couch will assume the role of Chairman of the Board of Monarch, and the company will seek shareholder approval to change its name to Monarch Gulf Exploration, Inc. Mr. Couch is President of Couch Oil & Gas, a Dallas based domestic oil and gas exploration and production company with $3 Billion in oil & gas managed reserves and which focuses its efforts on natural gas reservoirs between 8,000' (4 BCF probable or $24 million) to 15,000' (100 BCF possible or $600 million). Over the past several years, Couch Oil has developed a highly positive risk spread track record of successful natural gas & oil wells in reservoirs at these depths.
The Company noted that the acquisition of this portfolio of producing hydrocarbon assets and recently drilled wells is the first step in forming a strategic relationship with Couch Oil & Gas. Monarch intends to follow a business plan of participating as a working interest partner in as many Couch Oil & Gas prospects as possible. Couch's thirty-eight years of oil and gas investment experience has created a methodology of tried and proven verification techniques which are coupled with a 20 wells per set risk management technique.
The Couch team generates a few prospects and acquires many other prospects from oil and gas geologist and geophysical generation teams. The typical prospects take 2 to 4 years to generate and verify. Couch Oil & Gas usually has 20 wells at all times available to other energy companies. As many as 30 prospects are reviewed weekly with only a small number classified as "A" prospects and worthy of investments risked in each group of 20 wells.
Couch notes the industry is typically run by independent prospect generators who will spend 3 to 4 years generating a single well prospect, a risky strategy. An estimated 75% of wells are being drilled with this poor risk management. This single well approach is often unsuccessful for the individual investor, whereas larger oil companies use multiple well programs and are the typical industry survivors. Seasoned oil and gas investors tend to prosper by spreading their risk over 20 wells or more.
Couch seeks to achieve a 50% success rate with 6% monthly ROI over each set of 20 wells. Wells drilled since May 2003 have actually experienced a success rate and monthly ROI well in excess of these targets. This success has been attributed to new seismic algorithms being enhanced by the Couch verification team. John Girgis, former exploration manager for Diamond Shamrock, YPF Repsol, and Maxus Energy and Boris Starokozhev, former head of the 5th largest oil company in Russia head up the Couch verification team. Russia seismic methods were 5 years ahead of American studies until recently. Couch has spent millions on seismic verification research. Each well selection has many verification geologists and geophysics review due to the many oil and gas companies that follow the Couch lead.
"We are thrilled with the opportunity to become associated with Mr. Couch and the Couch Oil & Gas team," said Bob Jorgensen, President of Monarch. "We are convinced that the market fundamentals of energy supply and demand are very positive for the producing manager, and therefore, participating in the development of significant Texas and Louisiana gulf coast natural gas and oil reserves will be a great business for the rest of the decade. We are also extremely pleased that we have the opportunity to join forces with a group which has a proven track record of drilling and completing wells and extensive verification tools," said Jorgensen.
In other news the Company announced that it has no immediate plans to divest its Nevada gold properties, but will continue to seek to advance their exploration and development through joint ventures or other means.
Certain statements contained herein may contain forward-looking statements that involve risks and uncertainties. Therefore, actual results may differ materially from those projected or implied. As a result, these forward-looking statements represent the Company's best judgment as of the date of this news release.
For further information, please contact Robert Jorgensen at (509) 465-1177.