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Dutton Associates Announces Investment Opinion: ReoStar Energy Speculative Buy Rating In Initiating Coverage By Dutton Associates

Posted on: Thursday, 27 September 2007, 12:00 CDT

Dutton Associates initiates coverage of ReoStar Energy (OTCBB:REOS) with a Speculative Buy rating and a 12 month $1.60 price target. The 24-page report by Dutton senior analyst Richard R. Wolfe, CFA, is available at www.jmdutton.com, and at First Call, Bloomberg, Reuters, Zacks, Knobias, and other leading financial portals.

ReoStar Energy is a high-potential, early-stage oil and gas development company, already operating a considerable inventory of producing assets in the Texas Barnett Shale and Corsicana Fields, and with additional undeveloped acreage in the rapidly developing Arkansas Fayetteville Shale play. A 2007 reserve audit by independent petroleum engineers credited the Company with proved reserves of 11.7 million barrels of crude oil (11.4 MBO undeveloped) and 3.4 billion cubic feet of natural gas (1.6 Bcf undeveloped), for a total of 71.1 billion cubic feet, natural gas equivalent (Bcfe). The Company has an experienced management team, including senior members who go back over four decades in the Gulf Coast oil and gas exploration and production business. The Company has structured its operations efficiently from a financial standpoint, using farmouts of its Barnett Shale leasehold interests to avoid incurring significant capital costs and making investments in drilling and pipeline assets to ensure that its operations proceed without interruption. ReoStar's Corsicana acreage began redevelopment in June 2007 using enhanced oil recovery (polymer flood) technology. The shallow drilling at Corsicana and the inexpensive techniques to be applied make the project attractive from a risk-reward standpoint. In the Fayetteville Shale play, major U.S. independent E&P companies have become engaged over the course of the last two years in a large-scale natural gas development program, activity that we believe will support the value of ReoStar's holdings in the play.

About Dutton Associates

Dutton Associates is one of the largest independent investment research firms in the U.S. Its 31 senior analysts are primarily CFAs, have expertise in many industries. Dutton Associates provides continuing analyst coverage of over 140 enrolled companies, and its research, estimates, and ratings are carried in all the major databases serving institutions and online investors.

The cost of enrollment in the Dutton Associates one-year continuing research program is US $35,000 prepaid for 4 Research Reports, typically published quarterly, and requisite Research Notes. Dutton Associates received $35,000 from the Company for 4 Research Reports with coverage commencing on 9/27/2007. Dutton Associates does not accept payment of any of its fees in company stock. Its principals and analysts are prohibited from owning or trading in securities of covered companies. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities or issuer. Neither the analyst's compensation nor the compensation received by us is in any way related to the specific ratings or views contained in this research report or note. Please read full disclosures, and analyst background at www.jmdutton.com before investing.

Source: Business Wire

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