Silverarrow to participate with Pan Ocean and Hilton on project
Pan Ocean Explorations Inc POE
Shares issued 3,031,035 1999-09-20 close $0.55
Monday Sep 20 1999
See Silverarrow Explorations Inc (SVI) News Release
Mr. Robert Grey reports
The company has executed an agreement with Pan Ocean Explorations Inc., a company with two common directors, pursuant to which the company will be acquiring from Pan Ocean a 45-per-cent working interest in the East Thornton project, northern San Joaquin Valley, Calif. Pan Ocean will also own a 45-per-cent working interest, and Hilton Petroleum Ltd. will have a 10-per-cent carried interest in the project.
In consideration for acquiring the 45-per-cent interest, the company will make a cash payment to Pan Ocean of $250,000. The company will also pay $173,500 (U.S.) for land acquisition costs. Furthermore, the company will then finance all further costs on a pro rata basis with Pan Ocean. Hilton has a 10-per-cent carried interest in the East Thornton project for the land acquisition costs and drilling the first well. Hilton must participate on a working interest basis on all further wells.
The original vendor of the East Thornton project, Archer Explorations Inc. of Bakersfield, Calif., shall have the right to back in to a 20-per-cent working interest in the area of mutual interest (AMI), after $6-million (U.S.) net revenue has been generated and or, back in within 30 days of the completion and testing of the first well, at Archers' discretion.
The East Thornton project covers 3,000 acres and is approximately 60 miles north of Bakersfield, Calif., within the northern San Joaquin Valley. The area is a prolific gas producer having accounted for over 75 per cent of the regions 9.5 trillion cubic feet of gas production.
Three prospects within the AMI (West Galt, Woodbridge and North Woodbridge) will test objectives within the Winters formation, a thick sequence of porous, submarine sandstones. Although major reserves have been produced elsewhere in the basin from equivalent rocks, in the northern San Joaquin Valley few wells have penetrated this formation. Wells testing these sands were drilled on shallow structures not coincident with deeper structures and stratigraphic traps.
The companies have identified within this deep trend, three areas that are highly prospective for accumulations in sandstones at depths between 7,000 and 9,000 feet. These targets have been generated from approximately 47 miles of 2-D seismic. Seismic anomalies elsewhere in the basin have been identified with large, productive gas fields.
The companies plan to commence immediately the contracting of a 3-D seismic program to be completed over the next 90 days. Information provided by the survey will further define existing drill targets. Well drilling is to commence in early 2000.
The company has arranged a non-brokered private placement of 6.5 million units at 15 cents per unit for the raising of $975,000. Each unit consists of one common share and one share purchase warrant entitling the holder to purchase another share of the company for one year at a price of 20 cents.
Silverarrow will use the proceeds of the private placement to finance the company's commitments to Pan Ocean Explorations Inc. and the 45-per-cent working interest in the East Thornton project.
A finder's fee is payable with respect to the above transaction, All of the above transactions are subject to approval by the Vancouver Stock Exchange. |
