2009-04-17-2009-04-16-2009-04-16

Bought 800 acres in WY Arvada prospect.

Sheridan, Wyo.-based Pinnacle Gas Resources Inc. (Nasdaq: PINN) has sold its interest in approximately 800 net undeveloped acres in the Arvada prospect in Wyoming to an undisclosed buyer and certain gas-gathering assets in the Cabin Creek area of Wyoming to Big Horn Gas Gathering LLC, the field operator, for approximately $3.2 million. The Arvada acreage held no production and was not operated by Pinnacle. The company used part of these proceeds to repay debt under its credit facility to $9 million. It is currently out of compliance and has received a waiver, but must reduce its debt to $6.5 million by October. Pinnacle is marketing certain assets to raise additional capital and reviewing alternatives for raising additional capital through equity and debt financing, capital restructuring and possible mergers. "Pinnacle is considering a number of opportunities to raise cash and improve liquidity through the sale of nonstrategic assets, says Pinnacle president and chief executive Peter G. Schoonmaker. "The sale of the Cabin Creek gathering system to the operator was in the best economic and strategic interests of Pinnacle. Moreover, the sale of a small piece of our nonoperated, undeveloped acreage provided immediate cash to Pinnacle with little opportunity cost." Pinnacle focuses on coalbed-methane properties in the Rocky Mountain region including in the Powder River Basin in northeastern Wyoming and southern Montana and in the Green River Basin in southern Wyoming.