HOUSTON, TX -- (Marketwire) -- 01/05/12 -- Circle Star Energy Corp. (OTCBB: CRCL) ('Circle Star' or the 'Company'), a performance-driven company with interests in a number of high-impact, large scale oil and gas plays in Texas, is pleased to announce a recent asset sale collectively known as JHE Holdings for $9.35MM in cash. The transaction closed on December 30, 2011 and is effective January 1, 2012.
JHE Holdings was acquired by Circle Star on June 15, 2011 and generated over $550,000 in cumulative cash flow from operations during the time it was owned by the Company. As a result of the sale, Circle Star will realize over $3.4MM in net cash after debt and interest payments incurred during the same period. The sale results in an excellent transaction with an internal rate of return of over 265% and a cash-on-cash return of nearly 150%, with the earnings slated for immediate strategic reinvestment and continued growth of the Company's oil & gas portfolio.
Company CEO Jeff Johnson comments, 'The sale of JHE Holdings shows that we can generate solid returns for our shareholders through the acquisition and participation in the growth of quality assets. We are focused on opportunities to capture real, tangible financial returns and will continue to execute our strategy to successfully identify and bring superior ventures into the Company. By nurturing our interests in quality development stage projects into revenue positive assets, our portfolio grows into an attractive mix of saleable opportunities positioned to generate significant returns for the company and, in turn, value for our shareholders.'
It should be noted that the JHE Holdings sale does not include the Company's recently acquired interest in the 1,280 acre Glass Prospect operated by Apache Corporation and located in the oil-rich Permian basin region of Texas. We remind readers that development wells on the Glass Prospect leases have so far focused on the Spraberry formation which is ranked in the USA as third in proven reserves at over 10 billion barrels and currently sits at seventh in total production. The project is also prospective for both Fusselmen and Cline Shale opportunities with Apache actively drilling horizontal Cline shale wells in the same field as the Glass Prospect, where a recent Cline well drilled by Apache produced 8800 BOE in the first 30 days on-line. Additional investment in this attractive opportunity is under consideration and may be realized as part of the recent sale noted above.
Further details regarding the Company, its appointments, finances and agreements are filed as part of the Company's continuous public disclosure as a reporting issuer under the Securities Exchange Act of 1934, as amended, filed with the Securities and Exchange Commission's EDGAR database. For more information visit: www.circlestarenergy.com.
Notice Regarding Forward-Looking Statements
This news release contains 'forward-looking statements' as that term is defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Such forward-looking statements include, among other things, the development, costs, results and potential diversification of new business opportunities. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the inherent uncertainties associated with new business opportunities and development stage companies and the possibility that certain transactions may not close. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those projected in the forward-looking statements. Although we believe that any beliefs, plans, expectations and intentions contained in this press release are reasonable, there can be no assurance that any such beliefs, plans, expectations or intentions will prove to be accurate. Investors should consult all of the information set forth herein and should also refer to the risk factors disclosure outlined in our annual report on Form 10-K for the most recent fiscal year, our quarterly reports on Form 10-Q and other periodic reports filed from time-to-time with the Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Except as required by law, the Company assumes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.