Capital City Energy Group, Inc. (OTCBB: CETG) (the “Company”)
or (“Capital City”)
announced today that it has completed a merger with a publicly traded
company, under which the parties have assumed the operations and
business model of Capital City, a rapidly expanding energy company.
Founded in 2003, the Company’s business is
evolving from being an innovative leader in the design, management and
sponsorship of retail and institutional direct participation energy
programs to become one of the few vertically integrated independent oil
& natural gas companies. The Company’s
strategy is to expand a portfolio of rapidly growing core areas which
provide opportunities through grass-roots drilling, operating, well
servicing, acquisitions and fund management. The Company operates three
divisions, which is called the Triad business model consisting of fund
management, principal investments and strategic acquisitions of energy
related companies.
In late 2006, the Company began making principal investments in energy
properties alongside the energy funds it was managing. The Company
committed its capital to purchasing various interests in production and
development wells for its own account. These interests were purchased
from the operators where there was a previous relationship through the
fund management platform. This initiative was the Company’s
first step in moving towards its’ present
business model.
For the fiscal year ended 2007, Capital City had revenue of
approximately $2.9 million, and EBITDA, a non-GAAP measure, of $1.9
million. There are currently approximately 23.9 million shares
outstanding.
“We are excited to complete the merger and
become a public company,” said Timothy W.
Crawford, Capital City’s Chief Executive
Officer. “We believe our business model is
unique among the oil and natural gas industry, as we combine the
expertise we have developed running a successful energy funds management
business, a promising portfolio of oil and natural gas properties and a
highly focused acquisition strategy, we believe Capital City is uniquely
positioned for growth.”
The Company’s three divisions include:
Energy Funds Management. Since inception, the Company has
successfully invested in oil and gas properties, delivering superior
returns for investors and will continue to establish and manage funds
for investors.
Principal Investments Division. Through this division, Capital
City invests its own capital in energy properties through joint ventures
and partnerships with other oil and natural gas companies. The
relationships with the various funds the Company manages allow it to
make these independent investments in oil and gas properties. These
investments include strategic ownership in production, locations for
future drilling, equipment, pipelines, seismic, acreage or other energy
related properties that may not be suitable for the Company’s
income oriented energy funds, but have potential for growth and
strategic advantages for Capital City’s
energy funds and shareholders.
The principal investment strategy of the Triad is to continue investing
in similar assets as the funds, while using the same proven strategy
employed by the Funds. The investment mix of direct working interests in
oil and gas wells, pipelines and acreage positions will certainly be
considered, however, the Company may be able to negotiate superior terms
with operators and owners since the company will have more capital to
deploy with minimal upfront costs, and with greater flexibility to
invest across a broader spectrum of potential projects. The Company’s
initial positions include the prolific Texas Barnett Shale natural gas
formation, coal bed methane development in southeast Oklahoma along with
production from the Woodford Shale, and horizontal drilling development
of oil and gas from the Buda and Georgetown formations in southeast
Texas.
Strategic Acquisitions. The Company is focused on acquiring
complementary energy-related businesses. It believes its ability to
bring capital, contacts and financial structure makes it an ideal
partner for many privately held middle-market companies ($10-$100
million in revenues and/or enterprise value) in the energy sector who
seek to grow or capitalize their businesses. Acquisitions will include
well operators, drillers, pipelines, energy service companies and lease
owners, among others. Capital City anticipates financing these
acquisitions with a combination of cash, stock and bank debt.
The direct ownership in the full spectrum of energy assets allows
Capital City to extend greater strategic control over its investments
and strengthen its position as a vertically integrated, full-service
energy company.
The Company is continuing to aggressively pursue its Triad business
model by acquiring energy-related businesses that are strategic to the
core fund management business such as drillers, operators, service
companies, pipelines, and lease owners, among others. The combination of
the Triad strategy is allowing Capital City to become more opportunistic
and afford the Company greater strategic control over its investments
through vertical integration. The direct ownership in the full spectrum
of assets within the energy industry transforms Capital City Energy
Group into a more dynamic and full-service energy company.
Safe Harbor Statement
Investors and readers are cautioned that certain statements contained in
this document, as well as some statements in periodic press releases and
some oral statements of our officers and directors during presentations
about our energy funds, along with Capital City Energy Group's filings
with the Securities and Exchange Commission, including the Company's
registration statements, quarterly reports on Form 10-Q and annual
report on Form 10-KSB, are "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (the
"Act"). Forward-looking statements include statements that are
predictive in nature, which depend upon or refer to future events or
conditions, which include words such as "expects", "anticipates",
"intends", "plans", "could", "might", "believes", "seeks", "estimates"
or similar expressions. In addition, any statements concerning future
financial performance (including future revenues, earnings or growth
rates), ongoing business strategies or prospects, and possible future
actions, which may be provided by the Company's management, are also
forward-looking statements as defined by the Act. Forward-looking
statements are based on current expectations and projections about
future events and are subject to various risks, uncertainties and
assumptions about Capital City Energy Group, its technology, economic
and market factors and the industries in which the Company does
business, among other things. These statements are not guarantees of
future performance and Capital City Energy Group, Inc. undertakes no
specific obligation or intention to update these statements after the
date of this release
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