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Oil & Gas News: Doral Energy Signs LOI To Sell Some Assets To Alamo

April 22, 2010 (FinancialWire) — Doral Energy Corp. (OTCBB: DRLY) has executed a letter of intent for the sale of all  of Doral's interests in the Hanson Property oil and gas assets located in Eddy County, New Mexico, to Alamo Resources, LLC, a private oil and gas company based in Houston, Texas.

Total consideration for this transaction could reach $11.5 million, with $10 million payable at closing and an additional $1.5 million in incentive payments to Doral upon certain production milestones being met over the first 24 months. Doral will execute definitive binding agreements with Alamo Resources on or before April 30, 2010. Closing is anticipated to occur on or before June 15, 2010.

Upon execution of a mutually acceptable purchase sale agreement and a non-refundable escrow deposit of $250,000 by Alamo Resources, the company expects to receive an additional forbearance from Macquarie Bank providing the necessary time to close the transaction. The letter of intent does allow Alamo Resources, LLC to extend the closing date to July 15, 2010 with an additional non-refundable escrow deposit of $250,000.

This transaction allows Doral to fully pay its existing debt facility while leaving the company with a cash surplus allowing Doral Energy the potential of acquiring additional oil and gas assets within the Permian Basin. Doral Energy will remain an oil and gas operator within the state of New Mexico and seek to acquire under-valued assets within this region of the Permian Basin as well as within Texas. Doral will additionally seek strategic partnerships with other partners in order to diversify potential acquisition investments as well as diversify its risk propensity.

C. K. Cooper & Company served as financial advisor to Doral Energy in relation to this transaction.

Doral Energy Corp. (OTCBB: DRLY) is an oil and gas exploitation and production company headquartered in Midland, Texas.

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