PROPERTY ACQUISITION / Gulf Canada Resources Enters into Mogolian
Project
GULF CANADA AND ROC OIL ANNOUNCE INVESTMENT IN A NEW FRONTIER WITH
PURCHASE OF PROJECT IN MONGOLIA
DENVER, COLORADO, Jan. 23 /CNW/ - Gulf Canada Resources Limited and Roc
Oil Company Limited announced today the purchase of all of the assets of
Nescor Energy Company. The assets purchased include approximately 6 million
barrels of proved oil reserves, existing infrastructure and 6.5 million highly
prospective acres in the East Gobi Basin, southeastern Mongolia. The purchase
cost is US$14.25 million.
The acreage acquired is covered by two production sharing contracts for
blocks 13 and 14. Additionally, the companies have executed contracts for two
contiguous blocks, 15 and 10-North, that will increase the total area under
lease to 16 million acres. Government approval for the additional blocks is
expected later this quarter.
Existing reserves are confirmed by Ryder Scott engineers and are
contained in the Tsagaan Els oil field. The companies expect to begin
production from existing wells during the first quarter and will begin
drilling additional appraisal and development wells in the second quarter.
Infrastructure purchased will support drilling, production and transportation.
Oil will be transported via an existing rail system that connects the property
to the China border and sold under a purchase agreement negotiated with
Sinochem International Oil of China. Based on initial evaluation of seismic
data, Gulf and Roc have identified upside potential within the Tsagaan Els
field and in nearby fault blocks.
Mongolia's production sharing contract terms, regional geology similar to
China's productive Erlian Basin and access to China's growing demand for
petroleum make this an exciting new area. Adds J.P. Bryan, President and
Chief Executive Officer of Gulf Canada Resources, ''This project contains
existing productive capability, significant upside by way of both exploration
and exploitation, and there is a short time between investment and ultimate
sales. This is an ideal profile of the worldwide projects that Gulf has been
assembling over the past three years, and we think it holds the potential for
adding significantly to shareholder value.''
''Because the global market for oil properties has been hot, not to say
overheated, it is particularly exciting to acquire 16 million acres in a
virtually unexplored, petroliferous basin with a level of infrastructure that
can only be described as surprisingly good; all in a country with a
wonderfully supportive Government'', said John Doran, Chief Executive Officer
of Roc Oil Company.
Gulf Canada Resources Limited holds 75% of the joint venture and Roc Oil
Company, an unlisted Australian oil company, holds 25%. |
