Date sent: Tue, 12 Oct 1999 04:04:49 -0700
From: newsout@stockwatch.com
Subject: Stockwatch: Nikos Explorations Ltd - News Release
To: global@cybersurf.net
Nikos joins gas exploration syndicate
Nikos Explorations Ltd NIK
Shares issued 2,291,613 Oct 4 close $0.25
Tue 12 Oct 99 News Release
Mr. Peter Dunfield reports
Nikos Explorations Ltd. has joined the Solana California Gas Exploration
Syndicate, a subsidiary of Solana Petroleum Corporation of Calgary, and is
made up of independent resource and other companies. The syndicate is being
formed to acquire, explore and develop oil and gas prospects in the San
Joaquin and Sacramento Basin of California and possibly elsewhere. Solana
will be manager of the syndicate.
Through the syndicate, Nikos has entered into an agreement to acquire a
6.25-per-cent working interest in a 40-acre tract held by ABA Energy
Corporation of Bakersfield, Calif., on the Cal Canal anticline in the San
Joaquin Basin of Kern County, Calif. By drilling an exploratory well to a
specified depth within the Miocene temblor formation below 14,500 feet, and
establishing paying production therefrom, the syndicate can earn a
100-per-cent working interest, and a 78.5-per-cent revenue interest before
payout. ABA will be operator and will retain the option to take a
5-per-cent working interest in the tract prior to any drilling.
The cost of the work program is estimated to be $7.2-million. The estimated
cost to be incurred by Nikos to earn its interest is $450,000 (U.S.), of
which $100,000 (U.S.) has been advanced by the company as a deposit.
According to a report by an independent geologist/geophysicist, the
ABA/Solana tract is thought to be located totally within the Cal Canal
anticline's structural closure, approximately 1,500 feet from Berkely
Petroleum Corp.'s Cal Canal No. 1 exploration well.
The Temblor formation, which is estimated to be at least 4,000 feet thick
and contain multiple, thick, stacked reservoir sands at Cal Canal, is
productive at the giant Elk Hills field to the southeast at about 10,000
feet, and at Lost Hills, where Berkely has encountered gas and condensate
at 17,650 feet. Through 1997, the Temblor formation, although lightly
explored, had produced a total of 115 million barrels of oil, principally
from the McKittrick, Cymric and North Belridge fields. The five main oil
fields comprising the southern San Joaquin Basin, has produced a total of
1.2 billion barrels from all formations during the same period. At Cal
Canal, the Temblor is thought to be gas-bearing, with additional potentials
for retrograde condensate and light oil reservoirs in multiple horizons.
The long-range objective of the syndicate is to acquire and develop
prospective oil and gas properties, with a focus on both the Sacramento and
San Joaquin basins of California, especially in Sacramento, where no deep
tests have been drilled despite numerous prospects.
As a condition of, and order to finance the aforementioned acquisition,
Nikos has negotiated a non-brokered private placement of two million
special warrants at 20 cents per special warrant, for a total of $400,000.
Each special warrant will entitle the holder thereof to acquire one unit in
the capital of the company, at no additional cost, on the earlier of a date
that is one year from the closing of the sale of the special warrants or
the fifth day following the date that the company receives receipt for a
final prospectus qualifying the common shares arising from the exercise of
the special warrants for distribution in British Columbia.
Each unit received from the exercise of the special warrants will consist
of one share and one warrant, which will entitle the holder to purchase one
additional common share of the company for a period of two years at 40
cents for the first year and 46 cents for the second year.
The company has agreed to use its best efforts to become an AIF issuer
(will file an Annual Information Form with the B.C. Securities Commission),
within four months from the closing of the private placement. Being an AEF
issuer at the time of distribution of the shares and warrants will entitle
the company to legend the securities with a hold period of four months from
the closing date. In the event Nikos fails to become an AIF issuer, the
company has agreed to use its best efforts to file and obtain a final
receipt to a prospectus as soon as possible, for the purpose of qualifying
the issue of the same securities. In such case, the shares and warrants
will not be restricted as to resale in British Columbia.
The company further announces that Peter Dunfield has joined the board of
directors and has been appointed president. John Pallot has resigned as a
director of the company and Edwin Bomford has resigned as president.
The aforementioned acquisition and private placement are subject to the
approval of the Vancouver Stock Exchange.
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