You are so polite Janet that I have to post more about OCL...
Oracle Energy provides Romanian concession info
2005-09-13 16:15 ET - News Release
Mr. Nasim Tyab reports
ORACLE ENERGY ACQUIRING INTEREST IN SIX ROMANIAN OIL AND GAS CONCESSIONS
Oracle Energy Corp. has received TSX Venture Exchange approval for the property purchase agreement dated July 5, 2005, as amended Aug. 17, 2005, between Oracle Energy Corp. and Carpathian Energy Companie Petroliera SRL pursuant to which the company may acquire up to a 20-per-cent interest in six oil and gas claims located in Romania known as the Bordei Verde West field and the Nadlac, Catrunesti, Cozieni, E. Ciumeghiu and N. Ciumeghiu concessions. The $500,000 (U.S.) purchase price will be satisfied by the payment of $166,667 ($60,000 (U.S.) paid) and the issuance of 2,751,177 shares in three equal stages on or before 180 days from exchange acceptance. A finder's fee is payable on this transaction.
As part of the approval process Oracle engaged Chapman Petroleum Engineering Ltd., a Calgary-based petroleum engineering and consulting firm, to complete an independent reserve and economic evaluation report on the company's targeted oil and gas properties in Romania.
The Chapman report evaluates three of the six concessions in which historic data are sufficient to support an assignment of reserves. These concessions are: Cozieni, Nadlac and Bordei Verde West. The other three concessions were reviewed and may still have potential, but the data were not sufficient to support an assignment of reserves at this time.
Bordei Verde West
This field was discovered in 1972 and is situated 40 kilometres southwest of the city of Braila. It consisted of 25 wells that were crude oil producers and seven wells that produced natural gas. In this field it is intended to re-establish production through the drilling of up to 14 new wells, some on existing locations and other step out wells to develop extensions to the pool.
Nadlac
This field is close to the Hungarian border, between Arad and Szeged. The reservoir was discovered in 1978, and has been fairly closely delineated by 10 wells, of which three were actually placed on production. These three were initially oil wells, but the adjacent gas cap eventually caused excessive gas production at the expense of the oil rate. One well was later recompleted into the gas cap. All of the remaining reserves in the Nadlac field have been assigned to the gas cap portion of the pool. The initial pool development involves re-entering two wells and drilling four additional new wells for rich gas production.
Cozieni
The Cozieni field is located approximately 10 kilometres east of Bucharest. It was discovered in 1968 and two wells were completed for production. The Cozieni gas field comprises a series of stacked, shallow sandstones, ranging in depth from approximately 450 metres to 850 metres. Local production practice favoured sequential rather than commingled production of different intervals. The development plan for the Cozieni field is to re-enter the two original wells and recomplete them in bypassed intervals.
Product prices
Crude oil prices used in the Chapman evaluation are forecasted to average $36 (U.S.) per barrel in 2005, which reflects $6 (U.S.) per barrel less than West Texas Intermediate crude (WTI). Thereafter, the oil price continues to follow the Chapman forecast for WTI, less $6 (U.S.) per barrel, to account for transportation, quality and local market conditions. Natural gas prices are forecasted to average $3.25 (U.S.) per thousand cubic feet in 2005, escalating to $3.90 (U.S.), $4.49 (U.S.), $4.93 (U.S.) and $5.00 (U.S.) in successive years.
Fiscal regime
Royalties payable to the Romanian government for the expected production rates are a maximum of 5 per cent. Development expenditures in excess of $1-million (U.S.) will earn the joint venture a five-year tax holiday. Following this exempt period, a 16-per-cent corporate tax is levied on the future profits from the development project.
Capital expenditures
The investments required to undertake redevelopment of the fields are predominately drilling and re-entry costs. Most of the infrastructure required for oil and gas production is already in place from the previous development in the area. Accordingly, capital cost estimates in Bordei Verde West are limited to $265,000 (U.S.) per well drilled, completed and equipped. New wells in the deep Nadlac field are estimated to cost $900,000 (U.S.) each. Re-entries in Nadlac field are projected to cost $200,000 (U.S.) per well and $100,000 (U.S.) per well in Cozieni. These costs are expected to be sufficient to also cover downstream expenses for short flow-line tie-ins and metering.
SUMMARY OF RESERVES AND ECONOMICS:
ORACLE ENERGY INTEREST
Net reserves
Oil+NGL Gas
Mstb MMcf
Proved undeveloped 56 595
Probable undeveloped 113 1,229
--- -----
Total Pv plus Pb undev. 169 1,824
SUMMARY OF RESERVES AND ECONOMICS:
ORACLE ENERGY INTEREST
Net cash flow
M$US M$US
undisc 10% DCF
Proved undeveloped 3,712 2,343
Probable undeveloped 8,118 4,528
------ -----
Total Pv plus Pb
undev. 11,830 6,871
Mstb: thousands of stock tank barrels
MMcf: millions of cubic feet
M$US: thousands of U.S. dollars
The above summary reflects only Oracle at a 20-per-cent interest.
Oracle's $166,667 (U.S.) cash payment for the acquisition will be used to the benefit of both parties to commence reworking existing wells. As each well should begin generating revenue shortly following its completion, and if future work is carried out at a methodical pace, the future work should be largely self-financing.
The rework program on the first gas well in the Cozieni field is scheduled to commence shortly. The Cozieni field is located just outside of Bucharest, Romania.
In addition to the Romanian acquisitions the company holds a 7-per-cent participating interest in block 22, Yemen. Drilling of block 22's Beta prospect is scheduled to commence mid-October, 2005.
