DENVER, March 14, 2011 (GLOBE NEWSWIRE) -- Pure Cycle Corporation (the "Company") (Nasdaq:PCYO) announced it has entered into an oil and gas lease with Anadarko E&P Company, a wholly owned subsidiary of Anadarko Petroleum Company, on the mineral estate owned by the Company at its Sky Ranch property. Pure Cycle will receive a bonus payment of approximately $1,268,000 and will receive a royalty of 20% on the gross sales proceeds (less certain taxes) from oil and gas developed from the property.
"With this lease we are tapping into the rapidly evolving development of the Niobrara oil and gas formation in Colorado. Obtaining a lease for the mineral rights at the Sky Ranch property was highly competitive among a number of national and international oil and gas operators," stated Mark Harding, President and CEO of Pure Cycle. "Our selection of Anadarko was based on their familiarity with the site, their extensive lease holdings in the vicinity of Sky Ranch, and their willingness to enter into a surface use agreement that provides for the colocation of Anadarko's oil & gas wells with our water wells. It is our intent to have Anadarko develop its oil and gas sites ahead of full development at Sky Ranch. This allows us to monetize our mineral interests in a manner that will not adversely impact future urban development of Sky Ranch," continued Mr. Harding.
Anadarko is currently conducting a seismic survey of approximately 150 square miles surrounding and including the Sky Ranch property to further evaluate the production potential of the Niobrara oil and gas formation, a formation which experts believe could hold as much as 2 billion barrels of oil. "We are diligently working to position the Sky Ranch property to be among the first sites that Anadarko develops after completion of the seismic evaluation. Our acquisition of the Sky Ranch property continues to exceed our expectations and we are optimistic about the opportunities the Sky Ranch property provides the Company and its shareholders," concluded Mr. Harding.
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