Monday June 2, 9:00 am ET
HOUSTON--(BUSINESS WIRE)--Southern Star Energy, Inc., (OTC BB: SSEY.OB), is pleased to announced on May 16, 2008, the Company entered into the first phase of a credit agreement with Macquarie Bank Limited, an Australian bank, www.macquarie.com. This initial phase provides for a loan facility that makes available to the company a secured term loan not to exceed $2,000,000. Proceeds from this facility will be used to complete work on the initial five-well pilot program in the company?s Sentell Field Development Project in Bossier Parish, La.
As previously reported, the Company?s pilot program has resulted in 100% success. Four of the five wells drilled to the Cotton Valley Formation are flowing to sales. Final completion and hook-up activities are in progress on the fifth well and are expected to be finished within the next week. The loan facility has replenished the Company?s working capital, for use in planning additional development in Bossier Parish, La., as well as business development activities in other producing regions.
The Company expects to close a larger development financing facility by the end of June. When funded, the planned facility will allow Southern Star to launch its full-scale development program in Sentell Field later in the third quarter as well as initiate activities on other projects currently under consideration.
Further Information:
Shareholders and prospective investors are encouraged to visit Southern Star Energy?s website: www.ssenergyinc.com to learn more about the Company and the Cotton Valley Trend. Please feel free to call investor relations at 1-800-733-2447, Ext. 107, to receive a full corporate investor package.
About Southern Star Energy.
Southern Star Energy has a 40% WI in approximately 5700 acres under lease within the prospect area, which is defined by a string of ten vintage wells drilled in the 1950?s. The prospect area was historically developed on 640 acre spacing (wells approximately one mile apart). Most of these old wells were abandoned before 1972 after only producing from one relatively thin (20 feet) zone of the Cotton Valley sand members. None of the zones with identified reserve potential have been produced within a five mile radius of the prospect area. Preliminary plans, with continued successful evaluation drilling, will be to develop the leased acreage with at least one well per 160 acres, yielding a potential for 30 to 60 additional locations. Analog fields are being economically developed with at least one well per 80 acres indicating that many more wells can be reasonably contemplated.
Forward-Looking Statements
Except for historical information contained herein, the statements in this Press Release are forward-looking statements that are made pursuant to the Safe Harbor provisions in the Private Securities Legislation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause Southern Star Energy?s actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things: volatility of natural resource prices; product demand; market competition and risks inherent in Southern Star Energy?s operations.
For Further Information, Contact:
RedChip Companies, Inc.
500 Winderley Place, Suite 100, Maitland, FL 32751,
(800) 733-2447,Fax: (407) 644-0758,
info@redchip.com
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