UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16144 / May 14, 1999 SECURITIES AND EXCHANGE COMMISSION V. TITAN PETROLEUM CORP., MAGNUM PETROLEUM ENTERPRISES, INC., MAGNUM OIL & PETROLEUM, INC., NATALE L. MONTOZZI AND PHILIP LEITNER Civil Action No. 98-1111- CIV-KING (S.D. Fla.) On April 14, 1999, the Honorable James Lawrence King, United States District Judge for the Southern District of Florida entered permanent injunctions by consent against defendants Natale L. Montozzi ("Montozzi"), Magnum Petroleum Enterprises, Inc. ("Magnum Petroleum"), and Magnum Oil and Petroleum Inc. ("Magnum Oil") (Magnum Petroleum and Magnum Oil collectively "Magnum"). The orders permanently enjoin defendants Montozzi, Magnum Petroleum, and Magnum Oil from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Montozzi, Magnum Petroleum, and Magnum Oil did not admit or deny the Commission's allegations. The Commission’s complaint, filed on May 19, 1998, and amended on June 7, 1998, alleged that from April 2, 1997 through September 24, 1997, Titan Petroleum Corp. ("Titan") and its principals, Montozzi and Philip Leitner, fraudulently raised at least $654,770 by selling undivided, fractional working interests in three separate oil and gas well drilling programs to sixty- five investors. The complaint alleged, among other things, that the Titan offering documents represented that the amount of each investment was to cover all costs for drilling and completing the particular well in which it was invested, that Titan failed to disclose to investors that the amount of money raised in each case was far in excess of the costs it knew it would incur to drill and complete the well for which the funds were raised, that investor funds were commingled and used to pay a wide variety of expenses not provided for in the offering documents, including, large undisclosed payments to related parties, that two of the wells were drilled in locations different than those described in the offering documents, and that the offering documents and telephone script contained false or misleading statements concerning the success, experience and history of the company. The complaint also alleged that subsequent to the Commission’s investigation, the business of Titan was wound down and that Magnum Petroleum and Magnum Oil, were incorporated with Montozzi as a director and president of both Magnum corporations. Using offering documents virtually identical to those used by Titan, Magnum and Montozzi had been offering and selling undivided, fractional interests in at least one oil and gas well drilling program. The complaint alleged, among other things, that Magnum did not hold the necessary sublease to drill in the location cited in its offering documents, that Magnum did not disclose that it was successor to Titan, that Montozzi was president of all three corporations, that all three of Titan’s drilling programs had recently failed, and that Montozzi had a history of cease-and-desist orders entered against him by state authorities. The Court ordered that Montozzi disgorge $134,621, Magnum Petroleum disgorge $155,636, and Magnum Oil disgorge $155,636, representing their gains in connection with the securities issues noted in the Complaint, plus prejudgment interest. Based upon their inability to pay, disgorgement and pre-judgment interest were waived for Montozzi, Magnum Petroleum, and Magnum Oil. The Commission thanks the Louisiana Office of Financial Institutions for its assistance in this matter. See also: L.R. 15764 (June 2, 1998). 1