HOUSTON, Dec. 15, 2009 (GLOBE NEWSWIRE) -- Baron Energy, Inc. (OTCBB:BROE) ("the Company"), an independent oil and gas company, today announced the execution of a letter of intent to merge with Pertex Production LP and its affiliated companies Esconde Resources LP, and Permian Legend Petroleum LP, privately held Texas limited partnerships ("Pertex"). Pertex, a licensed Texas operator, owns and manages oil and gas assets located in the Permian Basin of West Texas.
The Letter of Intent ("LOI") is intended to set out the general conditions for an acquisition of Pertex's LP units containing assets, both operated and non-operated, with working interest ranging from 5% to 100% and all associated equipment and property rights (the "Working Interest") in oil and gas fields located in Bordon, Garza, Jones, Kent, Nolan, Reagan, Runnels, Scurry and Taylor Counties, Texas in exchange for shares of the Company's restricted common stock.
Under the terms of the LOI, the parties will complete relevant investigations and due diligence with respect to each other's assets, liabilities and corporate structure before December 30, 2009, with the expectation of entering into merger agreement and closing on or before February 15, 2010.
The Pertex management team will join Baron Energy, Inc., and bring more than 90 years of progressive oil and gas experience including both major oil company experience and independent company ownership, extensive business development, oil and gas valuations, funding, finance, accounting, tax, legal, contracts, land, geology, engineering, operations, and general management. The "team" will also bring more than 8 years of owner/operator experience in the Permian Basin of West Texas.
Management Comments
Mr. Michael Maguire, Chief Executive Officer of Baron Energy said, "This merger will provide a solid foundation to grow Baron Energy. Pertex's near-term production growth potential and synergies will add the cash flows needed for all shareholders to realize the long-term upside of both companies' assets."
Mr. Ronnie L. Steinocher, Manager and General Partner of Pertex said, "The merger of our private companies with Baron Energy, Inc., is an extremely positive step toward creating value for our unit holders. It will significantly enhance our ability to raise funds and structure producing property acquisitions. Our experienced management team will bring extensive operating experience in the Permian Basin of West Texas and a pipeline of potential acquisition opportunities within our core area of operations. Once the merger closes, we expect to move forward with a number of these acquisition opportunities in line with our substantial, near-term production goals."
About Baron Energy
Baron Energy (OTCBB:BROE) is an independent oil and gas exploration and development company with assets in the prolific oil producing region of North Texas and a significant acreage position along the Texas Gulf Coast. Baron's strategy is to grow production and reserves through low-risk, low-cost exploitation and development combined with higher risk exploration drilling in prospects that have the potential for significant hydrocarbon discoveries. This will be supplemented with acquisitions of underdeveloped properties that compliment the current core assets.
Baron intends to focus its efforts on the development and exploitation of its South Texas property primarily through joint ventures with industry partners. In addition the company will continue taking advantage of low-risk opportunities on its existing acreage while continuing to consider exploratory opportunities by applying technology and capital to deeper zones with significant upside potential. In conjunction, Baron will pursue accretive acquisitions in core areas.
Forward-Looking Statement
This Press Release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. A statement identified by the words "expects," "projects," "plans," "feels," "anticipates" and certain of the other foregoing statements may be deemed "forward-looking statements." Although Baron Energy believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to oil and natural gas prices, a material decline in production which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and gas prices and other risk factors. The Company's complete filings with the Securities and Exchange Commission are available at http://www.sec.gov.