ST. PETERSBURG, Fla., June 21 /PRNewswire-FirstCall/ -- US Natural Gas Corp (OTC Bulletin Board: UNGS), an energy exploration company with operations in the Appalachian Basin is pleased to issue the following letter to Shareholders.
Dear Fellow Shareholders,
As President and Chairman of US Natural Gas Corp, I would like to thank you for your continued support and take time to report on the many achievements we have accomplished over the past year of operation. In addition, I would like to update our new shareholders, obtained in the Wilon Resources, Inc. acquisition, on the issuance and registration of shares per the Plan of Share Exchange.
Over the past 12-18 months, management has focused on building an asset base consisting of oil and gas properties, leaseholds, mineral rights, and other energy related resources which we feel will build shareholder value over time. As recently announced, we have completed the acquisition of Wilon Resources, Inc., a development stage energy exploration company with operations in West Virginia. This transaction followed our acquisition of certain oil producing properties from KYTX Oil & Gas, LLC in Kentucky. Management has now defined a business plan of acquiring oil and gas producing properties to accelerate revenue growth.
The Company operates through four wholly owned subsidiaries:
US Natural Gas Corp KY ("USNG KY")
USNG KY is a wholly owned subsidiary which is responsible for the day to day operations of the Company's oil producing properties in Kentucky. Presently, USNG KY operates thirty oil wells of which 14 are in production in southern central Kentucky, and maintains a leasehold base of approximately 5700 acres. USNG KY will continue to rework and place acquired wells into production while growing the leasehold base. USNG KY recently launched a new drilling program targeting the Knox formation on the Turner leasehold in Green County, Kentucky with a goal of drilling three to four wells prior to year's end.
US Natural Gas Corp WV ("USNG WV")
Formerly Wilon Resources, Inc., USNG WV is a wholly owned subsidiary which is responsible for the day to day operations of the Company's natural gas development project in Wayne County, West Virginia. USNG WV operates 115 natural gas wells, 3 oil wells, and maintains a leasehold base of approximately 12,000 acres. The Company is placing the wells back into production on an individual basis after a series of tests and installation of completion components. At present, the Company has 30 wells in production and anticipates this number to increase to 60-65 by the end of August. The Company has entered into a purchase agreement allowing for firm capacity delivery of production, alleviating any reoccurring concerns of indefinite shut-in periods.
E 3 Petroleum Corp ("E 3")
E 3 is a wholly owned subsidiary which is the sole operating and bonding entity for the Company's wells in the states of West Virginia and Kentucky.
E 2 Investments, LLC ("E 2")
E 2 is a wholly owned subsidiary which focuses on acquiring assets valued or equities trading at inherently depressed levels. At present, E 2 owns the mineral rights on 180 acres of land in Wayne County, West Virginia, and a minority stake in a publicly traded specialty retailer catering to the hunting industry.
In summary, the Company through its subsidiaries operates 115 natural gas wells, 33 oil wells, and maintains a leasehold base of approximately 17,000 plus acres in the Appalachian Basin. During the third quarter, the Company will retain a regional firm to prepare a Reserves Report valuing the proven and probable mineral resources available for extraction on its leasehold base
As a primary supplier of natural gas, we are excited to see that President Obama and his administration are emphasizing the need to develop clean energy resources and increase energy efficiency. Natural gas is the cleanest burning fossil fuel. As additional alternative energy sources are added to the energy mix, natural gas will serve in a vital and predominant role as the generating fuel of choice.
We are excited to begin our transition from a development stage company to an operating company. As we continue to place additional wells into production in both Kentucky and West Virginia, we build upon our recurring revenue base. The capital expenditures dedicated to our West Virginia operation will decrease after our core group of wells are placed into production, thus allowing the Company to recognize a higher revenue base and ROI.
During July, the Company will launch its new website giving shareholders more transparency into our operations. We have included a section dedicated to well investors and lessors which will allow them to view and print monthly and annual reports.
Former Wilon Resources, Inc. shareholders should begin receiving communication from the Company and Broadridge over the coming days defining what is required to exchange their shares for those of the Company's shares. The warrants issued per the acquisition agreement will be sent directly from the Company beginning in July. The Company intends to file a registration statement for the newly issued shares and warrants prior to July 15, 2010.
None of what has been accomplished over the past year of operation would have been achievable with our truly dedicated employees and contract workers. I would like to thank each of them and you for your continued support, and I look forward to reporting to you on our further accomplishments as they develop.
President and Chairman
June 21, 2010
SOURCE US Natural Gas Corp