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Tulsa-based Beta Acquiring Red River Energy

Tulsa-based Beta Acquiring Red River Energy

Beta Oil & Gas Inc. of Tulsa, OK, plans to acquire private oil and gas producer Red River Energy Inc., also of Tulsa, for $23.5 --- assuming about $7.6 million of existing debt and issuing 2.25 million shares of Beta common stock. The deal is subject to approval by Beta shareholders.

Properties to be acquired contain estimated proved producing recoverable reserves totaling 22.5 Bcf of gas and 504,000 barrels of oil having a net present value, discounted at 10%, of about $23.5 million. The combined companies now have interests in more than 120 wells in four states, primarily Texas, Louisiana and Oklahoma, and operate more than 90% of those same wells.

"While the overall acquisition provides steady cash flow and significant recoverable reserves, more specifically, the West Huton Lime Unit gives Beta another play with substantial upside potential," said Beta President Steve Antry. "A pilot program is planned over the course of the next six months which, if successful, could setup in excess of 200 developmental future well locations. On a personal note, I am very much looking forward to working closely again with Rolf Hufnagel, who will become a Beta director and continue to run the operating subsidiary. I learned a tremendous amount from Rolf when employed by him in the mid-80s at Nerco Oil & Gas and am certain he and his team will be a great asset to the company."

West Huton holds bout 120 MMBoe of reserves. Overall, Beta's reserves are more than 60% gas, said Steve Fischer, vice president for capital markets. Beta had two discoveries last year, but Fischer said he couldn't comment on the recently public company's total reserves. Employees of Red River will go to work for Beta, Fischer said.

Joe Fisher, Houston

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