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OMDA Oil and Gas, Inc.
Updates Status of Letter of Intent to Acquire 1,135 Acre Fredericksburg
Prospect in Panola County, TX
Thursday November 4, 12:48 pm
ET
MIAMI--(BUSINESS WIRE)--Nov. 4, 2004--OMDA Oil and Gas, Inc.,
an oil and gas production company (OTC.PK:OMOG),
through its chairman, Adam Barnett, today has issued an update
as to the status of its formerly announced Sept. 7th Letter
of Intent to acquire an undivided 70% working interest in
this hydrocarbon rich, developmental oil and gas play. At
the time of our initial announcement of this project, we were
informed by Harold Smith, CEO of S&H Resources of Longview
TX, the operating company, that he expected to be able to
deliver clear title opinion and reserve engineering evaluations
to OMDA in approximately two to three weeks. Therefore we
informed our shareholders of this by stating; "The acquisition
is expected to close within a few weeks". Since almost
two months have passed since we made this announcement and
we have not yet consummated the deal, the Company felt that
it would be prudent to give an update as to the status of
the closing of this deal.
Smith has been keeping us informed as to the reasons for the
delay in his delivering the required information which in
no way has had anything to do with OMDA. The Company has been
prepared to close on this exciting prospect for the past six
weeks. Smith has explained that the reasons for the delay
in being able to deliver the information that OMDA has required
has been a combination of events. The primary reason for the
delay is the quantum leap in drilling interest in this hot
area due to record high oil and gas prices. Due to the complexity
of properly putting together a horizontal drilling program
of up to ten drilling prospects on this total lease which
is made up of some 15 subleases, all interest holders, to
include in excess of 350 royalty interest holders, must be
properly identified and verified. In the horizontal wells
that we will be drilling, where "laterals" can exceed
2,000 ft. on the horizontal, it is imperative that we have
no surprises on ownership of a penetrated lease after a well
is drilled and completed. OMDA has insisted that S& H
have this "title work" verified and delivered, with
opinion, by a reputable Oil and Gas Attorney. Under normal
circumstances prior to the leap in Oil and Gas prices and
activity in the area, this normal procedure should have only
taken a week or two. But, due to the increased activity in
the area, and the limited number of qualified "area knowledgeable"
Oil and Gas attorneys, this project had been "stacked
in the queue" .
We have now been informed that this project is being actively
"worked" and should expect to be delivered to OMDA
some time next week. Since the delay has been exclusively
caused, not by the company, but by S & H, there has been
a positive by-product of the delay for the Company. Smith
has agreed to a Company request to "sweeten" the
terms of the originally negotiated deal with OMDA.
Adam Barnett, Chairman, stated, "We have been shown
several other projects over the past two months, but none
with the upside potential of this exciting play. While there
is no assurance that the wells we intend to drill on this
prospect will even be commercially successful, we have been
provided with information that three "horizontal"
Fredricksburg Lime wells drilled on leases south of our intended
lease have successfully been completed with production rates
of 130 to 400 barrels of oil per day and gas rates of 200
to 500 mcf per day. Needless to say, that should we be successful
with wells anywhere near these levels, this field alone can
be a "company maker". Barnett went on to say, "Additional
reasons for our excitement in this prospect are two fold.
One; its relatively low risk, in that while we are budgeting
the approximately $750,000 per well to drill completely 'new'
wells for the horizontal program, we still have ownership
of the original 51 shut-in, once all commercial, wells on
the lease. These old wells were shut in years ago, not due
to cessation of the wells delivering oil and gas, but due
to economics of the time. With current prices, and modern
technology, there is every reason to believe that for minimal
costs, they also could be brought back into production. And
Two, there are two shallower hydrocarbon bearing zones on
these leases which have never been tested and also have commercial
potential. "
This release includes forward-looking statements made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties including,
but not limited to, the impact of competitive products, the
ability to meet customer demand, the ability to manage growth,
acquisitions of technology, equipment, or human resources,
the effect of economic and business conditions, and the ability
to attract and retain skilled personnel. The Company is not
obligated to revise or update any forward-looking statements
in order to reflect events or circumstances that may arise
after the date of this release.
About OMDA Oil and Gas, Inc.
OMDA Oil and Gas, Inc and it's wholly owned subsidiary's,
OMDA Oil & Gas Management, Inc and Texas OMDA Drilling
& Operating, Inc are in the business of oil and gas production
and lease acquisition. Currently the Company owns average
participation interests approaching 47%, in 355 producing
and non-producing oil and gas wells in Louisiana and Texas.
Contact:
OMDA Oil and Gas, Inc.
Adam Barnett, 305-609-2345
omoilandgas@aol.com
www.omogoil.com
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