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EXHIBIT 99.1
NEWS RELEASE
FOR RELEASE @ 12:00 AM, C.S.T., JULY 27, 2000
CONTACT: John Y. Ames, President & COO
Venus Exploration, Inc.
210-930-4900 ext. 1104
www.venusexploration.com
VENUS EXPLORATION ANNOUNCES EXCHANGE OF $700,000 OF DEBT FOR COMMON STOCK
& UPDATES DEVELOPMENT PROGRESS OF CONSTITUTION FIELD
SAN ANTONIO, TEXAS - JULY 27, 2000 - Venus Exploration, Inc. (VENX: Nasdaq
Smallcap(TM)), an independent oil and natural gas exploration and production
company, today announced that five of six holders of the Company's 7%
Subordinated Convertible Debt have agreed to convert the original principal
amount of their debt holdings, $700,000, into 799,997 shares (including 191,303
shares issued to induce early conversion) of Venus common stock.
Under the original terms of the debt instrument, the conversion rate
was $1.15 per share, and Venus lowered it to $0.875 per share to encourage
conversion. The remaining holder of the Subordinated Debt holds a convertible
note in the principal amount of $300,000. During the second quarter 2000, Venus
expects to record a non-cash charge of approximately $170,000 as debt conversion
expense. This non-cash charge represents the estimated value of the additional
shares issued due to the change in the conversion price.
The conversion of this debt to equity strengthens Venus' balance sheet
by reducing its leverage. The net increase in stockholders' equity is $700,000,
a 32% increase from the March 31, 2000, stockholders' equity of $2.2 million.
The conversion simplifies the Company's capital structure, and offers the
Company flexibility for possible future financings. John Y. Ames, Venus
President and Chief Operating Officer, said "We are pleased that the debt
holders have the confidence in Venus to take an equity position versus the
senior, interest bearing position they had."
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Of Venus' current operations on the Texas Gulf Coast, Ames said, "Our
Constitution Field development program in Jefferson County, Texas is
progressing. This development drilling program should favorably impact our
reserves, production and revenues over the next 18 months." The #1 Apache Gas
Unit well, operated by Venus in the Constitution Field, recently drilled to a
total depth of 14,910 feet, encountered three zones which appear to be
productive of gas and condensate. Evaluation of electric logs in that well
indicated that two primary objective zones in the Middle Yegua Formation at
14,229 feet and 13,912 feet are expected to be commercially productive and will
be produced after testing of the deeper third zone at 14,545 feet. The deeper
zone could possibly be commercially productive with formation stimulation or
sand fracture treatment. Formation stimulation and testing of the first zone to
be tested, the 14,545 foot zone, should be completed in approximately 60 days.
Ryder Scott & Company, independent engineering consultants, in its
estimate of Venus' reserves at December 31, 1999, estimated that the
Constitution Field Project, operated by Venus Exploration, Inc., may have six
proved undeveloped drill sites with 11 pay zones on the project's 4,946 gross
acres (4,538 net). Venus owns 15% working interest in the project and expects to
drill at least one additional well in the Constitution Field during the year
2000. The first well drilled by Venus in the field, the #1 Westbury Farms, is
currently producing gross 3 million cubic feet of gas per day and 450 barrels
condensate per day. Constitution Field is located approximately 15 miles west of
the Vidor-Ames Field (125 billion cubic foot of gas equivalent reserves)
discovered by the Venus exploration team in the early 1990's.
San Antonio-based Venus Exploration, Inc. applies advanced geoscience
technologies for the purpose of increasing shareholder value through the
discovery of oil and natural gas reservoirs in the United States. The company's
heritage dates back to the early days of energy exploration, when the Ames
family drilled its first oil well in Oklahoma in 1912. During 85 years as a
privately owned independent, Venus predecessors discovered, produced and sold
millions of barrels of oil from some of the most prolific fields in America. The
company focuses its exploration in the Expanded Yegua Trend of the Texas and
Louisiana Gulf Coast. On May 21, 1997, Venus Exploration, through a business
combination, emerged for the first time as a publicly traded entity on the
Nasdaq Smallcap(TM) market under the symbol VENX.
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FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The forward-looking statements are identified by language
that speaks of future events. For example, words such as "may," "could,"
"believe," "expect," "intend," "anticipate," "estimate," "continue,"
"projected," "future," "will," "seek," and "plan". The forward-looking
statements address such matters as geological estimates of oil and gas reserves,
exploratory and development drilling plans and schedules, capital expenditures,
availability of capital resources, financial projections, present values of
future production, financing assumptions and other statements that are not
historical facts. Although statements involving those matters are based on
information available at the time this news release was prepared, and although
Venus believes that its statements are based on reasonable assumptions, it can
give no assurance that its goals will be achieved or that the level of
production or financial return expected can be achieved. Some of the important
factors that could cause actual results to differ materially from those
predicted in the forward-looking statements include (i) state and federal
regulatory developments and statutory changes, (ii) the timing and extent of
changes in commodity prices and markets, (iii) the timing and extent of success
in acquiring leasehold interests and in discovering, developing or acquiring oil
and gas reserves, (iv) the conditions of the capital, debt and equity markets
during the periods covered by the forward-looking statements, (v) reliance on
estimates of reserves, (vi) drilling results, (vii) the Company's success in
raising additional capital to fund its operations and to fund the execution of
its strategy, and (viii) other matters beyond the control of the Company; e.g.,
the risk factors outlined in the Company's Form 10K for the year ended December
31, 1999.