2010-10-19-2010-10-18

To buy certain Monterey assets in six leases on 2,250 acres in Kern, Santa Barbara counties, CA, gaining 265 BO/d and 485,00 cf/d.

CSI Energy Inc., a subsidiary of Las Vegas-based E&P company Consolidation Services Inc., (OTCBB: CNSV) plans to acquire certain Monterey assets in California from Grayson Services Inc. and RMR Energy Resources for approximately $35 million.

The assets comprise oil and gas leases, equipment and operations in Kern and Santa Barbara counties, representing ongoing current production equal to 265 barrels of oil and 485,000 cubic feet of gas per day. The six leases currently have 54 producing wells on more than 2,250 acres, with producing zones including the Antelope shale, Monterey Chert, and Sisquoc sand formations.

Gary Kucher, president, says, "Historical well data and third party reports indicate that these oil fields have been significantly underdeveloped. We have designed exploitation plans for each property utilizing the latest petroleum engineering techniques. Through a strategy of in-fill drilling and the conservative deployment of commercially-proven oil field stimulation techniques, these new plans should enhance the recovery of proved reserves and prime the exploitation of the substantial unproved reserves of the acquisition."

The deal is expected to close in December. Consolidation Services currently owns oil and gas wells and mineral rights on approximately 13,500 acres in eastern Kentucky and in Tennessee.