colonial doCotton Valley Resources, Inc.
Proposed Ticker:CTVYF 8350 North Central Expressway, suite M2030
Exchange:NASDAQ-Small Cap Market Dallas, TX 75206
Industry:Natural Resources (SIC Code 1381) (214) 363-1968

Filing Information
Type of Shares:Common Shares Filing Date:1/23/97
U.S. Shares Filed:1,250,000 Filing Price:$6.20
Non-U.S. Shares Filed:0 Offering Amount: $7,750,000
Primary Shares:1,250,000 Expenses:$425,000
Secondary Shares:0 Shares Out After:12,904,901

Primary Underwriting Group
ManagerTierPhone
National Securities Corp.Lead Manager (800) 800-9217

Legal Counsel, Auditor and Registrar
Issuer's Law Firm: Weir & Foulds
Bank's Law Firm: Maurice J. Bates, L.L.C.
Auditor: Hein & Associates
Registrar/Transfer Agent: Equity Transfer Services, Inc.

Selected Financial Data

Dollar amounts in U.S. millions except for per share data
Full Year
Audited
Income
Latest
Unaudited
Income
Prior
Unaudited
Income
Balance
Sheet
6/30/96 6/30/96
Revenue:$0.00Assets:$11.98
Net Income:-$0.71Curr Assets:
EPS:-$0.06Liabilities:$2.86
Prior EPS:Curr Liabilities:
Cash Flow/Oper:-$0.27Equity:$9.12
Cash Flow/Fin:Cash:
Cash Flow/Inv:

Business Description
The company is a development stage oil and gas exploration, development and production company, with no operating history. Through its wholly owned subsidiary Cotton Valley Energy Corporation, the company owns 1) approximately 6,000 acres of primarily non-producing oil and gas leases in the Cheneyboro Field of Navarro County, Texas, 2) a 25% working interest in 1,145 acres of oil and gas leases in the Movico Field of Mobile County, Alabama, and 3) an option to acquire a 51.8% working interest in the Sword Unit, offshore Santa Barbara, California. Cotton Valley recently acquired an interest in the Alden Field of Oklahoma. At June 30,1996, Cotton Valley's proved oil reserves were approximately 4.8 million Bbl, and its proved gas reserves were approximately 13.5 million Mcf.

Use of Proceeds
The proceeds from the proposed offering will be used for development drilling, to acquire acreage, to reduce debt and for working capital.

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