Company Expects to Acquire Energy-Related Businesses to Build on
Successful Energy Fund Management Platform
COLUMBUS, Ohio--(Business Wire)--
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
CEOcast, Inc. for Capital City Petroleum
Daniel Schustack, 212-732-4300
Copyright Business Wire 2008
