VHGI Holdings, Inc. Subsidiary Signs Agreements to Purchase Assets of Sterling Exploration & Production Company and Yazoo Pipeline Company Estimated Netherland Sewell Reserves of 1.2 million Net Equivalent Barrels with a PV at 10% of $27 million

LEXINGTON, Ky., April 1 /PRNewswire-FirstCall/ -- VHGI Holdings, Inc. (OTC Bulletin Board: VHGI) announced today that its subsidiary, VHGI Gulf Coast Holdings, LLC has signed an agreement with the Trustee for Sterling Exploration & Production Company, L.L.C. and Yazoo Pipeline Co., L.P. to purchase all of the assets from such entities for $4.5 million in a Chapter 7 bankruptcy sale.  "The assets associated with this transaction will include thirty-seven wells, seven operated platforms, two outside operated platforms, and more than one hundred miles of oil and gas pipelines.  The company will be providing the specific details of this transaction in the filing of the 8-K report," stated Jim Renfro, President, VHGI Holdings, Inc.

The closing of this transaction is subject to certain conditions precedent, including approval of the bankruptcy court and the consideration of higher or otherwise better competing bids.  There can be no assurances that a higher or better competing bid will not be received or that the bankruptcy court will approve the sale of the assets of VHGI Gulf Coast Holdings.

If completed, this acquisition will mark a major milestone in the history of VHGI Holdings and immediately launch the company from an exploration company to one directly producing revenue from the production of both oil and gas.  "VHGI 's new business plan revolves around the identification and subsequent purchasing of select assets that are either currently producing revenues or with some additional capital can achieve revenues quickly and maintain an interest in those assets,"  continued Renfro, "and we feel that the Sterling-Yazoo purchase is one such step in the right direction."   VHGI plans to continue to grow in the energy sector and intends to align itself with experienced partners to quickly establish a presence in this market.  To that end, the company has recently partnered with Gulf Coast Exploitation, LLC to run the operations.  Gulf Coast Exploitation's management team has over ninety years of experience in the Gulf and Texas state waters.  Gulf Coast will invest $1,500,000 in this transaction and will own 33% of VHGI Gulf Coast Holdings.

The reserve report prepared by Netherland Sewell (NSAI), an independent third party engineering firm, provides very favorable reserve estimates for the E&P PDPs, PDNPs, and PUDs, with an estimate of $27 million PV at 10% of proven reserves of 1.2 million barrels.  All current and potential well sites are located offshore in the State Waters of Texas.  The operational activities include workovers, recompletions, and development drilling at multiple tracts.

About VHGI Holdings, Inc.

VHGI Holdings, Inc. is a diverse company with assets and interests focusing on Precious Metals Markets (www.vhgigold.com ), and  oil and natural gas (www.vhgienergy.com), both wholly owned subsidiaries of VHGI Holdings, Inc.  VHGI Holdings, Inc. has recently initiated steps to leverage the company's operating history and corporate resources within these industries and intends to pursue these opportunities through, acquisitions and joint ventures. Investors are invited to obtain information concerning our operations at (www.vhgiholdings.com) or by calling Investor Relations at 561-515-6035 or emailing [email protected].

Safe Harbor Statement:

The statements in the press release that relate to the company's expectations with regard to the future impact on the company's results from new products in development and any other statements not constituting historical facts are "forward-looking statements," within the meaning of and subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Since this information may contain statements that involve risk and uncertainties and are subject to change at any time, the company's actual results may differ materially from expected results. This document may contain forward-looking statements concerning the Company's operations, current and future performance and financial condition. These items involve risks, contingencies and uncertainties such as product demand, market and customer acceptance, the effect of economic conditions, competition, pricing, the ability to consummate and integrate acquisitions, and other risks, contingencies and uncertainties detailed in the Company's SEC filings, which could cause the company's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by these statements. The Company undertakes no obligation to revise any of these statements to reflect the future circumstances or the occurrence of unanticipated events.

For Further Information:

Shareholder Relations – Communications   561-515-6035

SOURCE VHGI Holdings, Inc.

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