LAS VEGAS, June 15, 2006 (PRIMEZONE) -- Quantum Energy, Inc. (OTCBB:QEGY) is pleased to announce it has concluded its asset purchase agreement for all of the assets of KOKO Petroleum Inc., a Pink Sheet Listed Company. KOKO has acquired various oil and gas interests in Texas over the past two years, focusing on domestic exploration and redevelopment.
Included in the assets acquired is an interest in the Corsicana Field polymer pilot flood project. The polymer flood program consists of implementing a controlled, chemical flood into the existing reservoir, which will create a sweep of existing oil in place. The Company has retained one of the leading firms in ASP flood engineering (Surtek, Inc.). Surtek, based on extensive, previous experience, feels that 20% to 40% of the original oil in place could be recovered with a properly implemented ASP flood. The Corsicana Field is the oldest oil field in Texas and was founded by Magnolia Oil Co., which subsequently changed their name to Mobile Oil. Original engineering has estimated total original oil, in place, at approximately 120 million barrels. The Field has produced approximately 30 million barrels since it was brought on-line in 1890.
Capital for the pilot has been committed and the initial drilling phase has been completed. The Company expects the flood process to commence in the fourth quarter of this fiscal year. The Company's total acreage in the field is 4,000 acres and it has retained a 25% working interest the pilot flood for their investment.
Quantum will also participate in a 3D seismic shoot over the Corsicana Field in order to identify deep, oil bearing reservoir structures. There are numerous reservoirs present in the Corsicana oil fields including the Pecan Gap, Woodbine, Wolf City, Austin Chaulk, Cotton Valley and Smackover amongst others. Geologists have long felt that since most of the Field's production emanated from a shallow depth of 1,000', there were deeper source reservoirs from which this oil migrated. There has been virtually no exploration of deeper zones in the Corsicana Field. The seismic shoot should commence during the summer and the Company will retain its same working interest ownership in any exploration resulting from the survey.
The Company has also acquired assets in the Barnett Shale Play, located in the Fort Worth Basin. They are working interest participants in two wells in the Barnett shale which is operated by Rife Energy Operating, Inc., an affiliate of the operator for the Corsicana Field, Texas MOR, Inc. Both wells are in production.
The operators of both fields have been involved in oil and gas operations and development for over 40 years. They have a proven track record and have assembled a vertically integrated asset structure ranging from pipelines to drilling rigs. This enables the Company to participate in oil and gas projects unimpeded by the typical obstacles facing industry level, oil and gas investors; accessibility of service providers and transportation of product. Furthermore, this relationship fosters increased economies of scale and maximizes margins which translate to increased value for the Company and its shareholders.
Quantum has agreed to appoint board members and officers from KOKO to act in the same capacity. The Company intends on continuing the strategy of participation in the location and development of low-cost energy reserves in the continental United States.
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.