TYLER, Texas, May 23, 2006 (PRIMEZONE) -- Biogenerics Limited (Pink Sheets:BIGN) announces it has entered into a Letter of Intent to purchase the assets, operations and all oil/gas leases from an East Texas operator and drilling company which has been in the oil industry for over 30 years. The agreement is expected to be signed within 72 hours.
After proper due diligence is performed, Biogenerics will have three options available regarding this transaction:
1) The company can purchase the assets, operations, personnel,
existing mineral leases and existing 250 producing wells
in the East Texas Oil Field.
2) Biogenerics can elect to invest with this company in
150 re-work wells in the East Texas Oil Field.
3) The company can also elect to invest collectively in 12
wells to be drilled in West Texas. This company currently
employs 70 people, has its own rework rigs and drilling
rig, plus several years of experience in oil field
operations and management.
Biogenerics management is gearing up to purchase the entire operations of this company, which includes the wells mentioned in options (2) and (3). If the company's due diligence proves this transaction to be viable, then the result will be that Biogenerics has purchased proven reserves of 10.4 million bbls of oil which has historically graded out at the 42 gravity level, plus the opportunity to prove up and own another 15 million bbls of oil reserves. The daily production of existing wells in the East Texas Oil Field being acquired is estimated at 275 bbls/day. This will be a major step for the company and will place it as a major operator in the oil industry in the State of Texas and surrounding areas.
The company anticipates this deal should close within the next 120 days. Financing for the transaction is being researched with commitments for financing being obtained from three lending and investment sources.
Newly-elected CEO James Lancaster was instrumental in bringing this opportunity to the company. He stated, "My first direction for the company was to place it into a position to be a major player in the oil industry and to supply it with the tools and personnel to do so. This opportunity, if realized, will do just that. Not only will it provide us with a well known name in the industry as an operating company, but the experienced personnel that come with this transaction will add to our ability to be a major player in the oil industry."
The current owner of the company being purchased has agreed that if this transaction closes, he will become a member of the Board of Directors of Biogenerics for a period of two years in order to help guide the company in its quest to be a major oil industry company. "We welcome this opportunity and hopefully will find in our due diligence procedures that Biogenerics can take advantage of." Lancaster further stated that "Management is looking at other lease and investment opportunities at this time. These include a 600 acre lease in Texas, 6 gas wells in West Texas, 110 acre lease in East Texas and other opportunities as they present themselves."
Website: http://www.bignltd.com
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Statements in this release that are forward-looking statements are based on current expectations and assumptions that are subject to known and unknown risks, uncertainties, or other factors which may cause actual results, performance, or achievements of the company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Actual results could differ materially because of factors such as the effect of general economic and market conditions, entry into markets with vigorous competition, market acceptance of new products and services, continued acceptance of existing products and services, technological shifts, and delays in product development and related product release schedules, any of which may cause revenues and income to fall short of anticipated levels. All information in this release is as of the date of this release. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations.