Sonoran Energy, Inc., the independent oil and gas exploration and production company, today reported a number of major developments:
- It has safely suspended work on its high impact Crosby 25 and 36 wells due to unforeseen technical challenges that require additional work exceeding the company's current financial resources. The wells are left in a status that meet regulatory requirements and facilitates future work.
- Two major shareholders have made a combined additional $3 million investment, which will be used to support financial obligations associated with the Louisiana program and to embark on selective work-over projects in Sonoran's West Texas properties.
- Sonoran's Board of Directors have formed a Committee to review strategic options for maximizing shareholder value from the company's current financial and asset base.
Peter Rosenthal, Chairman and CEO commented: "We are all disappointed that we did not get Crosby 25 and 36 to flow as a result of our work-over programs. However, through the upgrading process we saw evidence of the high value of the reservoir potential of these two wells (confirmed by actual production tests and by Haas Petroleum Engineering Services). The well economics remain highly attractive; however, the indicated work plan exceeds our current financial resources and risk tolerance. In the context of the strategic review that will be undertaken by the Board and management, we will examine all options for extracting the maximum value from these properties and the high quality work that our team has invested in bringing them forward."
The Company has finalized a new equity raise of $3 Million from two existing shareholders. Details of this transaction will be made public in an 8K filling to be issued shortly. These funds have been partially used in the above operations and a part of the funds have been ear-marked for development work in West and East Texas.
The Company will embark on the first stage of a selective 14 well work-over program in West Texas in the KWB field while reviewing its strategic options.
