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Pegasi factsheet

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Pegasi Fact Sheet includes Overview, Today's Market, Company's Strengths, Recent News, 2012 Growth Strategy, and CMG's Investment Summary.

Pegasi Fact Sheet includes Overview, Today's Market, Company's Strengths, Recent News, 2012 Growth Strategy, and CMG's Investment Summary.

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  • 1. Corporate ProfileCompany Name: Pegasi Energy Resources Corp.Industry: Oil & Gas Drilling & ExplorationExchange: OTCBBSymbol: PGSIShares Outstanding: 54 millionMarket Cap: $37.95 Million as of 3/31/2012Website: http://www.pegasienergy.comOverviewPegasi Energy Resources Corporation (“PGSI”) is an independent organic growth-oriented energycompany engaged in the exploration and production of natural gas and oil through the development of arepeatable, low geological risk, high potential project in the active East Texas oil and gas region. PGSIcurrently holds interests in properties located in Marion and Cass County, Texas, home to the giantRodessa oil field, which has produced approximately 2.3 trillion cubic feet of gas and 400 million barrels ofoil. The field has historically been the domain of small independent operators and is not a legacy field forany major oil company. The attractiveness of unconventional horizontal plays is the relatively low drillingcosts compared to that of deep water and offshore drilling programs.Today’s MarketAccording to the Annual Energy Outlook 2012 Report, domestic crude oil production has increased overthe past few years, reversing a decline that began in 1986. U.S. crude oil production increased from 5.1million barrels per day in 2007 to 5.5 million barrels per day in 2010. Over the next 10 years, continueddevelopment of tight oil, in combination with the ongoing development of offshore resources in the Gulf ofMexico, will push domestic crude oil production to 6.7 million barrels per day in 2020, a level not seensince 1994. U.S. production of natural gas is expected to exceed consumption early in the next decade.This reflects the increases use of liquefied natural gas in markets outside of North America, strongdomestic natural gas production, reduced pipeline imports and increased pipeline exports, and relativelylow natural gas prices in the United States compared to other global markets.Company’s StrengthThe Company holds 26,617 gross/17,983 net acres in the Bossier/CottonValley shale oil play in the Rodessa field of East Texas, with over a 100 ofits 375 potential wells, identified for drilling opportunities.PGSI has 11 producing oil and gas wells and has established a provedreserve base in the Rodessa field region. Independent geological andpetroleum consulting experts James E. Smith and Associates hasassessed that the producing fields contain Net Proved plus ProbableReserves of 3.7 million barrels and Possible Reserves of 10.6 millionbarrels of oil and additionally Undeveloped Prospective Resources (bestestimate) to be approximately 77.1 million barrels of oil. Presented by Century Media Group - New York, NY
  • 2. The Company also has a significant infrastructure in place including a 45-mile gas gathering pipelinesystem which is connected to an interstate gas transmission pipeline, and a salt water disposal plant; all ofwhich contribute to maximizing cash flow.PGSI’s management team has an average of over 30 years of experience in the oil and natural gasindustry with specific experience in East Texas.Recent NewsMarch 28, 2012 - Pegasi Successfully Drills Its First Horizontal Well…The Morse Unit # 1-H is the first horizontal well in Pegasis planned development of its extensiveCornerstone Project in East Texas.Pegasi’s 2012 Growth Strategy The Company recently raised $7 million in equity. Proceeds will be used to drill two wells using horizontal drilling and multi-stage fracking of the proven oil bearing shales of the Bossier/Cotton Valley formations in its “Cornerstone” acreage in the Rodessa field of East Texas. The Company recently began drilling on the first of its two wells. The successful development of these horizontal wells will enable the Company to potentially achieve a positive cash flow by Q2 2012. Following successful completion of the two wells, PGSI plans to raise $50 to $100millionwith a strategic partner to finance an accelerated drilling program.CMG’s Investment SummaryWe believe Pegasi Energy Resources offers a Bakken-like play in the prolific East Texas Rodessa field.The opportunities for horizontal drilling, multi-stage fracking programs reminds us of American Oil & Gas(AEZ) which implemented a similar strategy in late 2009 and was ultimately acquired by Hess in June2010. The equity saw over a 500% increase in valuation during this timeframe. We feel PGSI is at thatinflection point where a similar investment opportunity may exist. Comparative stock charts below: American Oil & Gas Inc. (AEZ) Brigham Exploration Co. (BEXP) Acquired by Hess Acquired by StatoilCautionary Statement This document contains certain forward-looking statements, which are made pursuant to the safe harbor provisions of thePrivate Securities Litigation Reform Act of 1995. Expressions of future goals and similar expressions reflecting something other than historical factare intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. These forward-lookingstatements involve a number of risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Factorsthat could cause or contribute to such differences include, but are not limited to, market acceptance of products, services and technologies,competitive factors, financial market conditions and the Company’s ability to continue to secure adequate sources of financing. The Companyundertakes no obligations to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after theavailability date of this document. Presented by Century Media Group - New York, NY

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