Texas American Resources Company Announces Divestiture of DJ Basin Properties for $150 Million

AUSTIN, Texas, July 14, 2011 /PRNewswire/ -- Texas American Resources Company ("TARC" or the "Company") today announced that its affiliate TARH E&P Holdings, L.P. ("TARH") has entered into a definitive agreement to sell its Denver-Julesburg (DJ) Basin properties to Bill Barrett Corporation for $150 million. The sale includes the Company's existing production, proved reserves, and Niobrara oil development opportunities on its approximate 28,000 net acres of leasehold in Weld and Adams Counties, Colorado and Laramie County, Wyoming. The sale is expected to close in August and is subject to customary closing conditions.  The Company intends to use the net proceeds from the sale to repay debt and accelerate development on its oily Eagle Ford and Texas Panhandle assets.

David Honeycutt, President and CEO of TARC commented on the sale, "The transactional metrics for the sale of our DJ Basin assets are very compelling; we are delighted with the outcome. The resulting de-leveraging brings our Net Debt/EBITDA ratio to less than 3x. That being said, I expect that Bill Barrett Corporation will have great success throughout the portfolio. Given the outcome for both companies we have a true win-win scenario. We owe a special thanks to Randy King, Bill Anderson, and the entire Bank of America Merrill Lynch team. They worked hard for us and we hold them in high regard. We also had a fine collective effort from our Denver and Austin staffs, I am very proud of the talent we have in our organization. The benefits from our DJ Basin sale will allow Texas American to focus on the development of our very attractive oil-prone Eagle Ford assets in South Texas."

ABOUT TEXAS AMERICAN RESOURCES COMPANY

Texas American Resources Company is a privately-held independent energy company headquartered in Austin, Texas. Since its founding in 1990, TARC has focused on the acquisition and exploitation of proved or near proved properties in Texas and the Rocky Mountain region of the United States. The Company has a total proved reserve base of 34 MMBOE which is 33% developed and 52% oil and NGLs and has 104 MMBOE of 3P reserves plus resources. TARC operates over 260 producing wells in Texas, Wyoming and Colorado, and its company-wide total net production of approximately 2,500 BOEPD is 60% oil and NGLs.

LEGAL DISCLOSURE: Certain statements in this news release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, particularly any express or implied statements concerning future financial condition or operating results.  Although Management believes that the expectations reflected herein are reasonable, the matters discussed in this release involve risks, uncertainties, and other factors that may delay, prevent or adversely affect the transaction or the Company's planned activities and operations.  There can be no assurance that such expectations will prove correct.  All forward-looking statements are expressly qualified by this cautionary statement.

SOURCE Texas American Resources Company

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