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Re: janetcanada post# 1493

Thursday, 09/15/2005 9:01:15 PM

Thursday, September 15, 2005 9:01:15 PM

Post# of 2392
This should get us over $1...

Oracle options 8% more of concession from Yemen Mayfair

2005-09-15 19:58 ET - News Release

Mr. Nasim Tyab reports

ORACLE ENERGY ENTERS INTO AN OPTION AGREEMENT TO MORE THAN DOUBLE ITS INTEREST TO 15% IN THE BLOCK 22 OIL & GAS CONCESSION IN YEMEN

Oracle Energy Corp. has entered into an option agreement with Yemen Mayfair Petroleum (YMPC) to acquire an additional 8-per-cent interest in the expansive block 22 exploration concession in the Republic of Yemen.

As consideration for the option, the company will pay YMPC 200,000 Oracle common shares. This option agreement allows Oracle the right to more than double its participating interest in block 22 from 7 per cent to 15 per cent. The option agreement is subject to TSX Venture Exchange approval.

Oracle president Nasim Tyab says that this new option agreement offers the company considerable leveraged exposure to the "company-maker" potential of the 8,151-square-kilometre block 22 exploration concession, situated within Yemen's hydrocarbon-rich Tihama basin.

"With our initial focus on the Beta prospect within block 22, the joint venture partnership's initial October drill program is targeting multiple potential pay zones with the potential for world-class discoveries," he says.

"If the Beta drill program is successful, we have also identified at least four other prospects or leads on block 22 that would merit further evaluation and which could provide additional potential oil reserves."

Block 22 was awarded to YMPC in 1993. Notably, principals of YMPC were instrumental in the discovery of Yemen's first giant oil field in the mid-1980s, located in the Marib basin.

Prior to acquiring its initial 7-per-cent participating interest, Oracle commissioned an independent technical evaluation report by U.K.-based Merlin Energy Resources. The table below is an excerpt from the Merlin report and lists the potential reserves in only one of the potential pay horizons. Merlin has mapped a total of four horizons referred to as blue, orange, yellow and magenta.

Beta prospect potential reserves for orange seismic horizon 

 
      PROBABILITY (UNRISKED VOLUMES) 
         (in millions of barrels) 
  
                   P. 90  P. 50  P. 10  
  
 Oil in  
 place gross        186     340    565 
  
 Oil recoverable  
 gross               64     118    199


Oracle may exercise its option to acquire the additional 8-per-cent interest by paying YMPC $560,000 (U.S.) by Oct. 15, 2005, and by assuming 8 per cent of past exploration costs incurred on the block which equates now to $1,449,696 (U.S.). Past costs are to be paid over time following completion of a positive test well. The $560,000 (U.S.) paid to YMPC will be added to Oracle's contribution toward the drilling, testing and completion of the Beta-1 well, scheduled to be drilled mid-October, 2005.

Oracle will be credited for and entitled to receive its pro rata share of any deductions or cost allowances allowed pursuant to the production-sharing agreement (PSA) with the Yemen government. Oracle will also share with YMPC, on a pro rata basis, all rights and considerations entitled by YMPC pursuant to the PSA.

Oracle Energy presently holds a 7-per-cent participating interest in block 22. The cost to the company for its 7-per-cent participating interest is $700,000, which has already been paid. This also includes the assumption of 7 per cent of past costs incurred on the exploration block, equating to $1,155,000 (U.S.). Past costs are to be paid over time following completion of the first 8,000-foot exploratory well.

T

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