OIL CITY, La., July 13, 2010 (GLOBE NEWSWIRE) -- Black Dragon Resource Companies, Inc. ("the Company", "Dragon") (Pink Sheets:BDGR) is pleased to announce that the company has entered into a formal agreement with two complimenting private oil companies to create a Canadian Corporation to be traded on the German stock exchange. Each entity involved will have an equity interest in the newly formed company. Dragon will contribute its 640 acre Cotton Valley lease in exchange for shares in the the Canadian Corporation. These shares will be booked as an asset on Dragon's balance sheet. Dragon has agreed to keep the newly formed entity's common stock for a period of at least 18 months.
The value of this strategic asset will help to maintain intrinsic value for Black Dragon shareholders by using the strategic advantages of trading on this particular German exchange. It is illegal to short stocks on this exchange which will allow for a fair valuation of the newly formed entity's trading stock.
This structure also provides a comfort level to the German fund that has now committed to funding the Cotton Valley drilling program. The German fund has committed to fund up to 8 Cotton Valley Wells, one well at a time once the new company trading is on the German exchange in Euros dollars.
Further details of the funding are forthcoming.
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 re-complete 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.