2010-12-15-2010-12-03-2011-01-04

Bought company, gaining approximately 865,000 nonoperated gross acres in NM with 79 gross wells, gaining 230 BOE/d.

Midland, Texas-based Doral Energy Corp. (OTCBB: DRLY) has closed its merger agreement with privately held San Antonio, Texas-based Pure Gas Partners II LP and subsidiary Pure Energy Group Inc. in a $40-million deal. The merged entity is now known as Cross Border Resources Inc.

Pure Gas Partners LP transferred all of its oil and gas assets to Pure LP. Doral then acquired Pure LP in exchange for the issuance to Pure LP of approximately 10 million Doral shares valued at approximately $35 million, the assumption of $4 million in subordinated debentures and the assumption of the Pure Energy Group's existing senior debt of $1.6 million held by Texas Capital Bank.

Cross Borders Resources now has an authorized capital consisting of 36.4 million shares stock, with 12.45 million shares currently issued and outstanding.

Cross Borders' assets consist of approximately 800,000 non-operated gross acres (270,000 net) in New Mexico. Approximately 26,000 net acres are in southeastern New Mexico. Nearly all (99%) of the acreage is either owned mineral rights or held by production (HBP), with ownership in 79 gross wells (seven net) with current net production of 300 barrels of oil equivalent per day.

Of the approximate 26,000 net acres in southeastern New Mexico, management estimates that much of its current drilling inventory consists of horizontal opportunities in the emerging Bone Spring, Yeso, Abo and other proven formations in the Permian Basin. Pure is currently participating in two Bone Spring horizontal wells operated by Cimarex Energy Co., Denver, (NYSE: XEC), in addition to participating in a Yeso horizontal well operated by Concho Resources, Midland, Texas, (NYSE: CXO).

As of July 31, Cross Border Resources total proved reserves are 1.8 million barrels equivalent.

Cross Borders' management team consists of Everett Willard Gray II, as chief executive and chairman of the board; Larry Risley as president and chief operating officer; and Mark Stark as chief financial officer and treasurer. Gray is currently Doral's CEO, CFO, president, secretary and treasurer.

Gray says, "The company's experienced management team has worked diligently to provide Cross Border Resources shareholders a platform to capitalize on the current Bone Spring trend, as well as, a means to further exploit the company's asset base within the Abo, Yeso, and San Andres formations… Ultimately, Cross Border Resources' main objective is to become the premier non-operated working interest owner in the various emerging plays within the Permian Basin, in addition to participating in more conventional plays to provide a balanced oil and gas portfolio to shareholders."

C.K. Cooper & Co. was financial advisor to Doral.