SOLANA PETROLEUM CORP. ANNOUNCES ACQUISITION OF PARTICIPATION RIGHTS IN WEST VIRGINIA DEEP GAS EXPLORATION PROGRAM
SEC 12g 3-2(b) Exemption # 82-4931
CALGARY, Alberta, November 8, 1999, 1999- Solana Petroleum Corp. ("Solana") announced today that it has signed a Letter of Intent with Martin Twist Energy Co., LLC of Louisville, Kentucky ("Twist Energy"), whereby Solana has the right to purchase a 25% working interest in the Hoff #1 deep gas exploratory well currently being drilled by Twist Energy in Roane County, West Virginia. This equates to a revenue interest of 17.5% before payout and 15% after payout in the well.
The Hoff #1 is being drilled to an anticipated depth of 10,500' to test the deep gas potential of fractured carbonates in the Ordovician Trenton/ Black River Formation of the Appalachian Basin. This well is located 3,000 feet from Columbia Natural Resources' third well in their "Cottontree Field" deep gas discovery which was drilled on a large structure known as "Vineyard Ridge".
Columbia is also currently drilling a fourth well in the "Cottontree Field". Solana will also have the option to participate on a well-by-well basis with a minimum working interest of 70%, in an additional six well, deep gas exploratory program on a 788 acre lease block held by Twist Energy on the Vineyard Ridge Structure, bracketing Columbia's wells on both sides.
Agreement Give Solana Excellent Position in New Deep Gas Play
In addition to Solana's option on the six well Vineyard Ridge deep gas exploratory program, it also has obtained an option to earn a 70% working interest, and under certain circumstances up to 100% of the working interest in all other wells drilled on leases in West Virginia held by Twist Energy. This option covers an area of mutual interest ("AMI") in excess of 30,000 acres in the West Virginia gas producing counties of Calhoun, Roane, Ritchie, Wirt, and Wood. Over 10,000 of these acres held by Twist Energy are located within the 9 by 5 mile area which encompasses the Vineyard Ridge structure. According to the West Virginia Geological and Economic Survey ("WVGES"), in 1997 five counties produced a total of 14.6 billion cubic feet of gas from 7,340 wells.
West Virginia is the largest producer of oil and gas east of the Mississippi River. Natural gas is produced from 35,000 wells in 49 out of the state's 55 counties. West Virginia is the 11th largest gas producing state, with virtually all production presently coming from shallow gas wells averaging approximately 3,000' in depth. According to the WVGES, in 1997 the state produced a total of 178.2 billion cubic feet of natural gas, or an average of 488.3 million cubic feet per day.
Until Columbia's recent successful 28 well deep gas drilling program in New York State to the Trenton/ Black River Formation, and their drilling of their discovery well in Roane County, no West Virginia deep gas test had ever been attempted. This was despite geologic evidence of a deep Ordovician Appalachian Basin extending from New York State, through parts of Ohio and into West Virginia. Columbia has recently announced its intention to drill 12 more Trenton/ Black River wells in West Virginia over the next year.
Twist Energy's Hoff #1 well has already drilled to 2,000' toward its 10.500' objective and is currently undergoing rig repairs, with drilling expected to resume in about 10 days. Twist Energy will be operator for the venture with Solana. Boggs Natural Gas Co. is the drilling contractor. Extensive gas transmission and distribution facilities exist throughout Solana's AMI with Twist Energy, providing ready market outlets for any gas discoveries made by the venture.
Solana's acquisition of exploration rights in West Virginia represents a continuation of its recently announced thrust into deep, highly prospective, U.S. gas ventures with a long-term objective of becoming a significant domestic gas producer. U.S. deep gas targets represent a heretofore overlooked new exploration vista, where very large reserves of natural gas are thought to exist at depth on both East and West Coasts. Huge natural gas market outlets exist in both regions.
J. Bruce Carruthers II, Solana's President and CEO said, "We are pleased to be able to participate with Twist Energy in what we understand to be the only remaining large assemblage of leases containing deep gas rights in West Virginia. This is a unique opportunity for Solana to obtain a ground-floor position in sizeable and highly-prospective, deep gas acreage, in the heart of one of the world's largest energy markets."
In California, Solana and its partners hold the right to earn 100% of the working interest (Solana 25%) in a 40-acre tract in Kern County, on the Cal Canal Anticline, offsetting Berkley Petroleum's Cal Canal #1 deep gas test. The Cal Canal #1 well is currently reported to be drilling at 16,000+ feet just above the objective Miocene Temblor Formation.
In Colombia, Solana and its partners are preparing to spud the Mateguafa #2 appraisal well next month on the Tapir Association Contract in the Llanos Basin of the Eastern part of the country. The first exploratory well on the Tapir Block, Mateguafa #1, which Solana holds a 38.125% interest, tested 777 barrels per day of 32 degree API gravity oil earlier this year. The company recently announced the pending acquisition of up to an additional 11.875% of the Tapir Contract from Seven Seas Petroleum Colombia, Inc., which when completed, will give Solana a 50% working interest in the Contract.
Solana also holds rights to earn a 50% interest in the 126,000-acre Caño Caranal Association Contract, also in the Llanos Basin of Colombia, where a number of large structures are being evaluated for possible drilling.
This release may contain forward looking statements including expectations of future oil and gas production implying an assessment that the resources described can be produced profitably in the future. These statements are based on current expectations that involve a number of risks and uncertainties, which could cause actual results to differ from those anticipated.
Solana Petroleum Corp. trades on The Alberta Stock Exchange under the symbol "SOP".
For Further Information:
James B. Taylor, Chairman, Phone 505-983-7591; or
Wayne Stromme, Vice President, Canadian Operations, Phone: 403-261-9019
Toll Free: 877-261-9019 Website: www.solanapetroleum.com
The Alberta Stock Exchange has neither approved nor disapproved of information contained herein.
Columbia NR's
columbiaenergygroup.com
columbiaenergygroup.com
Regards
Taff |
