Double Down signs partner for Bear River prospect; private placement
Double Down Resources Ltd DDX
Shares issued 3,029,527 Oct 15 close $0.15
Thu 21 Oct 99 News Release
Mr. David Rutt reports
The company has signed a letter of intent with the Bear River Project Group
(BRPG). This letter agreement will allow the company to spud the first well
in early November. BRPG is a limited partnership created for the sole
purpose of drilling and exploiting the Bear River prospect, an exceptional
onshore natural gas target with the potential for four trillion cubic feet
of gas.
Under the terms of the agreement, Double Down will retain a 6-per-cent
working interest in the Souris permit with the cost of the first two wells
carried by the BRPG. BRPG will finance 70 per cent of the cost of the
initial test well in order to earn a 44-per-cent working interest, while
the permit holder will contribute the remaining 30 per cent toward the
completion of the first well and earn a 50-per-cent working interest. BRPG
will receive 500,000 share purchase warrants in Double Down, exercisable at
15 cents for a period of one year.
At this time, the company is pleased to announce a financing of one million
units at 15 cents per unit for gross proceeds of $150,000. Each unit
comprises one share and one share purchase warrant. The purchase warrants
are exercisable at 25 cents for a one-year period from the date of closing.
The Souris permit covers 175,984 acres in the Magdalen basin and is onshore
Prince Edward Island. The Magdalen basin covers 90,000 square kilometres,
or is approximately 1/4 in size of the Alberta basin. Previous drilling in
the basin encountered gas in 50 per cent of the wells drilled, including
one offshore well 40 kilometres from the Souris permit, which was
classified as a significant discovery and produced at the rate of 5.5
million cubic feet a day in production testing.
The Bear River prospect is a structural play defined by seismic. The
anticlinal structure is related to salt movement and growth fault within
the basin. Thick sandstone reservoirs are known in the area and are
associated with extensive river and estuarine channel deposits. Such
reservoirs can each 200 to 400 metres in thickness. Reasonable estimates
based on seismic data indicate a four trillion cubic foot target with the
potential for much more.
The permit is host to four known leads, or targets, or exceptional
potential, which could hold an additional seven to 10 trillion cubic foot
resources.
Strong financial returns are expected to be generated by the play owing to
its proximity to the Sable Island pipeline gathering system and subsequent
new markets in Quebec and the Maritime provinces. The quantity of gas
expected to be discovered should also provide exports to the Northeast
United States. In addition, the company has had discussions with various
groups interested in generating electrical power should the project prove
successful.
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