AUSTIN, Texas, April 27, 2011 /PRNewswire/ -- Texas American Resources Company ("TARC" or the "Company") today announced that its affiliate TARH E&P Holdings. L.P. ("TARH") has completed a farmout on a portion of its Eagle Ford and Buda acreage in South Texas. This transaction is strategically important as it will allow the Company to develop a portion of its lease acreage that was otherwise subject to continual drilling obligations or primary lease term expirations. If all options in the farmout agreements are exercised, TARH would farmout 50% of its interest in approximately 6,075 leasehold acres prospective for the Eagle Ford and Buda formations. All of the consideration in the transaction is in the form of a drilling carry. The drilling carry will fund the majority of the Company's 2011 South Texas capital expenditure budget.
David Honeycutt, President and CEO of TARC said, "Texas American is excited about moving forward on our two-pronged oil-prone strategy in the Eagle Ford and Buda formations. The farmout will allow us to de-risk all of our acreage in LaSalle and Frio Counties through drilling carry while continuing to retain operatorship and 50% ownership. This was our goal from the start since we are a long-standing operator in the area."
ABOUT TEXAS AMERICAN RESOURCES COMPANY
Texas American Resources Company is a privately-held independent energy company headquartered in Austin, Texas. Since its founding in 1990, TARC has focused on the acquisition and exploitation of proved or near proved properties in Texas and the Rocky Mountain region of the United States.
The Company has a total proved reserve base of 34 MMBOE which is 33% developed and 52% oil and NGLs and has 104 MMBOE of 3P reserves plus resources. TARC operates over 260 producing wells in Texas, Wyoming and Colorado, and its company-wide total net production of approximately 2,500 BOEPD is 60% oil and NGLs.
LEGAL DISCLOSURE: Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, particularly any express or implied statements concerning future financial condition or operating results. Although Management believes that the expectations reflected herein are reasonable, the matters discussed in this release involve risks, uncertainties, and other factors that may delay, prevent or adversely affect the transaction or the Company's planned activities and operations. There can be no assurance that such expectations will prove correct. All forward-looking statements are expressly qualified by this cautionary statement.
SOURCE Texas American Resources Company