OIL CITY, La., Oct. 22, 2009 (GLOBE NEWSWIRE) -- Black Dragon Resource Companies, Inc. ("the Company", "Dragon") (Pink Sheets:BDGR) has announced that its agreement with Kingdom Energy Partners (KEP) on the previously announced participation in the Humble Project on September 9, 2009 has been terminated by mutual agreement. Because of Black Dragon CEO's one-third interest in KEP, certain shareholders of Black Dragon raised issues about a possible conflict of interest. While full disclosure was made by Dr. Bailey to all parties regarding the potential conflict, in order to avoid any questions, both parties believed that it was appropriate to terminate the arrangement at this time. Counsel for the Company had opined that based on the facts presented, there appeared to be no violation of Delaware Law, based upon the absence of any special benefit to either party. However, there had been some negative pressure on KEP and Dragon from Black Dragon Stockholders about the possible conflict of interest, in light of Black Dragon CEO's executive position in both companies. This original KEP agreement was reached through the mutual contacts the CEO has in each entity and the Black Dragon Board was aware of this connection. Dr. Bailey was to receive no special benefit from the arrangement, but rather believed it was a good economic decision for Dragon that would otherwise not have been available. However, in the best interest of all, KEP has advised it preferred not to go forward with the deal with Black Dragon.
Dr. Bailey commented that although this deal was a potentially attractive arrangement, it is not the only avenue for the Company to continue to grow and attention will be turned to finding other attractive projects for the Company's participation. "The primary effort now," Dr. Bailey stated, "will be to get Black Dragon's own wells drilled on the announced 640-acre lease in Caddo Parish and to continue with internal cost reduction measures." All well permits have been received from the State and this drilling program is underway.
Black Dragon is an oil and gas exploration and production company currently focused on the acquisition of mature, producing and existing domestic oil and gas fields. This focus has eliminated exploration risk, reduced costs of completion, and provided rapid generation of income in a niche market where larger independent and major oil companies are not positioned to compete. Black Dragon intends to recomplete additional shallow producing wells and to expand its focus to include drilling of new wells, some to deeper levels and to purchase additional leases.
Forward-Looking Statements -- Safe Harbor:
Certain information discussed in this press release may constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company's inability to accurately forecast its operating results; the Company's potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company's business. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.