SANTA ANA, Calif., Jan. 27, 2004 (PRIMEZONE) -- Capco Energy, Inc. (OTCBB:CGYN) announced today that EBITDA from oil and gas activities is estimated to be $525,000 for the fourth quarter of 2003 as compared to a loss of $330,000 for the fourth quarter of 2002, an estimated increase of $855,000 for the comparable three month periods.
In 2004, Capco intends to: (1) develop the existing reserve base in the Texas Gulf Coast region, (2) evaluate, explore and drill prospects where the probability exists of large hydrocarbon discoveries, and (3) acquire domestic and international producing properties with known upside potential.
We will focus on:
Texas Gulf Coast Region: Capco operates and owns a 65% interest in the Brazos Field currently producing 2.5 mmcfd. The Texas Gulf Coast region has already produced trillions of cubic feet of gas since initial discoveries and substantial gas reserves are still remaining in the shallow waters. In December 2003, 3 non producing wells in the Brazos Field were converted into producers, resulting in an average production of 800 mcfd per well. The Company plans to convert as many as 10 additional wells into producing wells, increasing the production to about 7.5 mmcfd with an average capital cost of only $100,000 per well. The Company plans to continue to acquire non producing wells in this region and convert them into producers. The capital requirements for such acquisitions will be obtained from the sale of equity and internally generated cash flow.
Exploration: Capco is negotiating to acquire certain high quality prospects with existing boreholes in California and Louisiana which, if a discovery is established, could yield gas reserves in excess of 100 BCF or equivalent from each prospect. In both these areas the Company has leased acreage before and made certain capital expenditures. The leases expired before any conclusive results could be obtained. The existing bore holes, when evaluated with advanced techniques and expertise, provide information about the quantity and quality of the reserves, and provide huge cost savings by eliminating certain pre drilling costs and time. The timing for commencement of this operation is dependent upon the capital requirement of this undertaking, which is expected to be about $3.0 million. Capco may seek third party partners to share part of the costs to the Company.
Acquisitions: Capco will pursue acquisitions where upside exists and will rely on local operators where needed. The Company's Michigan, Montana and Alabama properties are operated by others and contribute about $225,000 monthly (after direct costs) to Capco's interest. Additional cash flow is anticipated upon the operator's consummation of the current development program. The Texas Gulf Coast properties are operated by the Company, from its Houston, Texas office, where the Company has local expertise and technical support. The Company is also evaluating certain domestic and international acquisitions in Africa and the Middle East from the Houston office and from the newly opened office in Islamabad, Pakistan. The capital requirements for the international deals are in excess of $10.0 million which will be funded, if agreements are reached, through the sale of equity and participation by independent third parties.
This announcement contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.