News Release [Logo]
January 13, 2000
FOR IMMEDIATE RELEASE
BENZ SELLS PORTION OF EXPLORATORY PROGRAM
HOUSTON, TEXAS - BENZ ENERGY INC. (VSE: BZG) today announces that it
has sold a portion of its exploratory program to Harken Energy Corporation
(Amex: HEC) for $12 million in convertible notes. The Company has retained a
twenty percent working interest, proportionately reduced to Benz Energy's
interest in each prospect, that vests after pay-out of Harken's drilling
costs, purchase price and cost of capital.
The sale covers three prospects in Texas, including the Old Ocean 3D
project and six prospects in Mississippi. Two wells have been proposed to
date on the Old Ocean project and the Company anticipates an aggressive
capital expenditure program by Harken to develop the prospects. The Company
will retain other exploratory assets in Mississippi and South Texas.
As part of the transaction, certain exploratory staff and
management, including the President and CEO, Prentis Tomlinson, have resigned
from the Company effective January 1, 2000. Robert Herlin, the current Chief
Financial Officer, has been elected to the additional position of President
and Chief Executive Officer. Mr. Tomlinson will continue with the Company as
the non-executive Chairman of the Board of Directors and has agreed to
provide technical advice as to the Company's ongoing development drilling in
Mississippi. Mr. Tomlinson and certain other departing employees have joined
with a company that has entered into exploration consulting and incentive
agreements with a subsidiary of Harken Energy Corporation.
Further, the Company has engaged Petrie Parkman and Co. to advise on
strategic options to maximize the value of the Company. These options could
include additional sales of assets, capital restructuring or possible sale or
merger of the Company.
Robert Herlin, President and CEO of Benz Energy, commented "This
transaction monetizes certain of our exploratory prospects while providing
Benz Energy with the opportunity to significantly participate in the upside
potential without risking further capital. To date, the Company has delayed
the testing of its prospect inventory, such as at Old Ocean, due to limited
resources. In addition, the reduction in staff and related expenses should
cut recurring overhead costs by 50% and bring the Company's ongoing cost
structure more in line with its existing production revenues."
Benz Energy Inc. is an exploration and development company based in
Houston, Texas focused on natural gas in the U.S. Gulf Coast of Texas and
Mississippi.
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Cautionary Statement as to Forward-Looking Information
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Investors are cautioned that the preceding statements of the
Company include certain estimates, assumptions and other forward-looking
information ("forward-looking statements (information)"). The actual future
performance, developments and/or results of the Company may differ materially
from any or all of the forward-looking statements (information), which
include current expectations, estimates and projections, in all or part
attributable to general economic conditions and other risks, uncertainties
and circumstances partly or totally outside the control of the Company,
including rates of inflation, natural gas prices, reserve estimates, drilling
risks, future production of oil and gas, changes in future costs and expenses
related to oil and gas activities and hedging, financing availability and
other risks related to financial activities.
The Vancouver Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or the accuracy of this release.
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For additional information contact: Robert S. Herlin
1000 Louisiana, 15th Floor, Houston, Texas 77002 Tel: (713) 739-0351
Fax: (713) 739-8402
e-mail: BHERLIN@BENZENERGY.COM