CGrowth Capital, Inc. Updates Shareholders on Oil Project

In the past week, several inquiries have been made to the Company in response to our most recent announcements regarding the West Salt Creek oil and gas property.   While there are limitations to the timing and amount of data that we can put out on a daily basis, the Company is committed to remaining transparent and communicating positively with it shareholders.  Provided below is an effort to better inform our shareholders about our immediate plans and provide answers to some of the questions that may not be answered in a limited press release.

Q:  Why would the prior owner of the leases contract with the Company when they have a NASDAQ company pumping next door?
A:  There were two main points in making their decision. The first was that the leases and wells were represented by many diverse shareholders which created operational inefficiencies.  This had a negative effect on the maintenance and eventual production at the site.   The second was that the ownership group was looking for an opportunity to participate in the upside.   After reviewing the Company?s business plan and mineral assets, they made the decision that joining as shareholders would provide them with both diversification and upside potential.

Q:  How many wells are currently producing and how many are under rework?
A:  There are a total of 38 wells currently on the site with 11 wells currently producing.   A majority of these wells have been included in a maintenance and operations contract with a third party contactor.  Under the agreement, the contactor will be providing up to $2m in services to cleanup and upgrade certain wells on the property.  The Company receives 20% of the Net Working Interest on the production of these wells.  While the initial production is small, based on the initial results of the work overs, we expect this interest to increase significantly over time.

Q:  What are the Company?s plans with for the current revenues?
A:  Our immediate goal is to put the Company in a position to be able to remove any going concern statement.  This removes the Company from any dependency on outside financing for operations and puts us in a much stronger position to negotiate contracts and larger finance packages.  Secondly, we have a tremendous opportunity to increase revenues from oil and gas production, so we will be taking every opportunity to put money back to work and add to both our gross and net revenues.

Q:  Do you need additional capital to finance work on the West Salt Creek property?
A:  A majority of the work over is being handled via the third party contract.  We are seeking additional capital to perform work overs on producing wells not included in the contract and to also drill new wells.

Q:  How many additional wells can be drilled on the property and how do you pay for them?
A:  There are currently 73 additional viable drilling locations that have been identified.  We are prioritizing a drilling schedule in anticipation of being able to fund those activities.  Funding might include debt, preferred equity, or participation in the well production.

Q:  Why preferred equity and what is your plan for the preferred shares recently issued?
A:  Our goal is to remain as neutral as possible on our current common share structure.  We do not see a benefit to diluting the common stock for sake of completing a deal.  Using preferred stock provides a bit more protection to an investor or asset holder and it gives the Company a period of time (2 years in the case of West Salt Creek) to finance the repurchase of the preferred shares.  That is not to say we will not issue common shares with a transaction, but we will be very careful in making those decisions and if we can offset in some way with a share retirement (as we did prior to completing the West Salt Creek agreement), then that is what we will do.

Q:  What is the status of the Texas Letter of Intent?
A:  We are still working on the proper financing for the Texas project.  Initially we had every reason to believe that we had all of the pieces in place to complete the LOI, however, we were not happy with what ultimately came out of financing for those wells.  We are really excited about the Texas site, which also has additional drilling opportunities beyond the first five, and we are continuing to create the best financing package possible for the Company.

Q:  Can you address the current share price of the common stock?
A:  We all would like to see a higher share price ? that is only natural.  However, the market is a funny thing and we cannot predict nor dictate how it will react to news and events.  The best thing we can do for the Company is to continue and build the business - that includes adding to our asset base and increasing our revenues.  We believe that we are doing a good job with the limited resources we have had to date.  We are not increasing our common stock on a monthly basis to complete deals and finance the Company as is the case with many public companies (including those from the OTC Pinksheets to those on the NASDAQ).  We believe the stock price will change with execution of our business plan and increased market awareness of our accomplishments.

Q:  Are any plans for the Company to begin filing with the SEC?
A:  We currently report more comprehensive information than many OTC QB or Bulletin Board companies.  Spending precious capital for the sake of filing a different report at this stage of our development will not do anything to advance the business.  The only groups who would benefit from a fully reporting company would be those looking to provide dilutive financing ? which we refuse to accept.  There will be a time and place for the Company to uplist from its current status and we will provide guidance on this issue in the future.