Platinum
Energy Resources, Inc. Provides Operations Update for Tandem Energy Holdings
NEW YORK, NY -- (MARKET WIRE)
-- 06/22/06 --
Platinum Energy Resources, (PGRIU
- news)
(PGRI
- news)
(PGRIW
- news)
("Platinum") a special purpose acquisition corporation focused on the
energy industry, today announced an operations update for the first five months
of 2006 for Tandem Energy Holdings, Inc. Platinum Energy had previously
announced that it entered into a definitive merger agreement to acquire Tandem.
In connection with the acquisition, Tandem has provided to Platinum Energy
detailed information regarding its production, operations and prospects, from
which the information described in this operations release is derived.
Operations Overview
During the first quarter of 2006, Tandem, as operator, drilled, reworked or recompleted 12 wells in four of its nine operated
properties. As of May 31st, total proved reserves for Tandem were estimated to
be 9,460 MBOE. This includes 3,300 MBOE proved developed producing reserves,
6,027 MBOE proved undeveloped reserves, and 133 MBOE proved developed
non-producing reserves. This is an increase of over 120 MBOE in PDP reserves
from the Dec 31, 2005 reserve report.
Mr. Jim Dorman, Executive Vice President of Platinum stated, "Given
Tandem's two drilling rigs, four pulling units and other field equipment, as
well as the talent and experience of Tandem's management team, Platinum will be
well placed to make substantial additions to the 9.5 MM BOE of proved reserves
of Tandem, once the acquisition is complete. Furthermore, using Tandem's base
of operations, a stepped up development program calls for the additional
drilling, reworking, and recompletion of
approximately 100 new completions per year."
"There are many opportunities by which we can expand proved reserves. We
believe that the proved reserves are underbooked, as
there are typically two to four proved undeveloped locations booked for each
proved developed producing well, whereas Tandem has less than one per
well," continued Dorman. "Most of Tandem's proved undeveloped oil
wells are currently booked at half of the expected production, based on what
was recovered from historical analogs. Also, minimal behind pipe reserves have
been booked, although we have identified many recompletion
opportunities."
Ball Lease
During the first quarter of 2006, on the Ball Lease in Palo Pinto County,
Texas, five new wells were drilled and two wells were recompleted
with initial production adding approximately 100 BOE per day net to Tandem.
This lease is sparsely drilled, has over 200 feet of Barnett shale below
existing producing reservoirs and has shallow sand development that has never
been tested on the lease. This potential significant upside has been identified
by Platinum's geologic staff and Tandem's engineering group, and will be
evaluated immediately after closing of the acquisition of Tandem.
Ira Unit
On the Ira Unit, located in
According to Toben Scott, drilling engineer for
Tandem, "This is our first use of horizontal drilling techniques, and it
was accomplished using our existing equipment and infrastructure. We believe
that horizontal drilling has the potential to double or triple the increase in
production per well over a typical vertical well with less than a 25 percent
increase in drilling cost."
Ballard Unit
Activity on the Ballard Unit, located in Eddy County, New Mexico has resulted
in one new well during the first quarter of 2006. This well, the Ballard Grayburg San Andres Unit #26-6, has stabilized production
of approximately 28 barrels of oil per day from the San Andres interval. Tandem
is currently drilling another well in this unit and completion operations are
ongoing on two other newly drilled wells. This unit is a prime candidate for downspace drilling and enhanced water flood expansion.
During June and July, 2006, it is anticipated that an additional four wells
will be drilled on the Ballard Unit.
Tomball Wilcox Drilling and Shallow Gas Reserves
During September 2006, it is anticipated that deeper drilling equipment will be
available to drill a 9,000 foot Wilcox test on the Tomball property located in
Harris County, Texas. Along with this new well, Tandem is planning a re-entry
well in the same fault block to exploit the potentially significant Wilcox
reserves.
Tandem recently completed a gas well at approximately 650 feet with initial net
production of 130 MCF per day of dry gas. Reserves for this well have not been
booked as yet, however it is anticipated that this shallow gas opportunity will
be expanded in the future. Additionally, over 20 plugged and abandoned wells
originally drilled by Exxon have been identified on the Tandem lease as
potential re-entry candidates. These wells have been drilled to depths
exceeding 5,000 ft and may have multiple productive pay zones that have not
been included in the company's proved reserve report.
Horizontal Drilling
Subject to the results of the first horizontal well, Platinum anticipates that
horizontal drilling techniques may be used on other Tandem leases going
forward. Compared to a vertical well, the anticipation is that drilling
productivity may be increased by up to a factor of three times with an increase
in costs of less than 25 percent. The expectations of horizontal drilling
economics have not been included in the company's proved reserve report,
prepared by Williamson Petroleum Consultants, independent petroleum engineers.
For additional information, including links to a Web cast of the Company's IPAA
presentation from April 10, 2006, and the revised preliminary proxy statement,
please visit the Platinum Energy Resources web site at www.platenergy.com.
About Platinum Energy
On January 26, 2006, Platinum Energy (PGRIU
- news)
(PGRI
- news)
(PGRIW
- news)
announced that it had entered into a merger agreement to acquire Tandem Energy
Holdings, Inc. Tandem is an independent oil and gas exploration and production
company headquartered in Midland, Texas.
Platinum has filed with the Securities and Exchange Commission a revised
Preliminary Proxy Statement seeking approval of its stockholders of, among
other things, its previously announced proposed merger with Tandem Energy
Holdings, Inc. ("Tandem").
Platinum Energy Resources, based in
Platinum Energy was incorporated in April 2005 to acquire an operating business
in the energy industry. Platinum Energy completed its initial public offering
on October 24, 2005, receiving net proceeds of approximately $106 million
through the sale of 14.4 million units of its securities at $8.00 per unit.
Each unit is comprised of one share of Platinum Energy common stock and one
redeemable and convertible common stock purchase warrant with an exercise price
of $6.00. Platinum Energy holds over $105 million in a trust account maintained
by an independent trustee, which will be released to Platinum upon the closing
of the merger (less any amounts returned to Platinum Energy stockholders who
elect to convert their shares to cash in accordance with Platinum Energy's
charter).
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, about Platinum Energy,
Tandem and their combined business after completion of the proposed merger.
Forward-looking statements are statements that are not historical facts. Such
forward-looking statements, based upon the current beliefs and expectations of
Platinum Energy's and Tandem's management, are subject to risks and
uncertainties, which could cause actual results to differ from the
forward-looking statements. The following factors, among others, could cause
actual results to differ from those set forth in the forward-looking
statements: business conditions in the U.S. and abroad; changing
interpretations of generally accepted accounting principles; outcomes of
government reviews; inquiries and investigations and related litigation;
continued compliance with government regulations; legislation or regulatory
environments, requirements or changes adversely affecting the businesses in
which Tandem is engaged; fluctuations in oil and gas prices and in customer
demand; management of rapid growth; intensity of competition; general economic
conditions; as well as other relevant risks detailed in Platinum Energy's
filings with the Securities and Exchange Commission. The information regarding
Tandem contained in this press release has been provided by Tandem. Further,
the information set forth herein should be read in light of such risks. Neither
Platinum Energy nor Tandem assumes any obligation to update the information
contained in this press release.
Additional Information
Platinum Energy stockholders are urged to read the proxy statement regarding
the proposed transaction because it contains important information. Copies of
filings by Platinum Energy, which will contain information about Platinum
Energy and Tandem, will be available without charge, when filed, at the
Securities and Exchange Commission's internet site (http://www.sec.gov),
and, when filed, will be available from Platinum Energy, without charge, by
directing a request to Platinum Energy Resources, Inc.,
The respective directors and executive officers of Platinum Energy and other
persons may be deemed to be participants in the solicitation of proxies in
respect of the proposed merger. Information regarding Platinum Energy's
directors and executive officers is available in the revised Preliminary Proxy
Statement filed with the Securities and Exchange Commission on June 5, 2006.
Other information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, will be contained in other relevant materials to be filed with the
Securities and Exchange Commission when they become available.
For more information
contact:
Alan Katz, CJP Communications
for
Platinum Energy Resources,
Inc.
Public & Investor
Relations
212-279-3115 x211