Consolidated Gulfside Resources Ltd. Enters Into an Agreement to Acquire a 20% Interest in Two Oil Wells Located in Orenburg, Russian Federation 11/23/2004 8:31:34 AM
TORONTO, ONTARIO, Nov 23, 2004 (CCNMatthews via COMTEX) -- Mr. Jack Wasserman, CEO of Consolidated Gulfside Resources Ltd (TSX VENTURE:CGL)(the "Company") is pleased to announce that on November 11, 2004 the Company signed an arm's length, non-binding Letter of Intent to acquire a 20 % working interest in two large oil wells, known as the Rozhdestvenskoe oil site, in the Region of Orenburg.
The Letter of Intent has been signed with Strat Petroleum Ltd. (OTC: SPRU.PS) which has a binding Letter of Intent to acquire a 49% actual interest in the field from, Ikornefi a partner of Gazprom, a major Russian oil & gas producer and refiner currently in the Orenburg Region, West of the Ural Mountains. The partners own a 100% interest in the oil field. The field is also only 20 km from the Orenburg-Kopanka Pipeline with a major refinery located 60 km from the field. In order to earn its 49% interest in the property Strat must raise US$10 million dollars. The funds are to be spent on doubling the current production from 975 barrels per day from the two wells currently producing and perform exploration work on the property to locate additional wells. Production levels will be increased by the use of additional modern drilling equipment and holes being drilled to deeper levels.
Gazprom, which will own 51% of the project after all agreements have been finalized, is controlled 100% by the Russian Federation and therefor no government approvals are necessary in order to complete this agreement. However, if Strat is unable to raise the balance of funds required CGL would not be eligible to acquire any interest in the project.
The Company will assist Strat Petroleum by raising US$4M of the required funds. Financing will be in the form of a long-term production loan with repayments to be made over a ten-year period and bearing interest at a rate of 5% per year. It is the intention of the Company to have a commitment for the funds in the next 60 days so that an agreement can be finalized with Strat. Funds will allow the operators to immediately increase current production from 975 barrels per day from well #230-375 BOPD and well #236-600 BOPD, which are generating estimated revenues of $500K US per month. The existing two wells have estimated reserves of 5.7 million barrels and will require about US$4M to double the current production with the balance of the funds used to further explore and develop the area. The Company will provide the necessary funding so that Strat Petroleum can start its program in the region and will immediately participate in any revenues generated by the joint venture. Details of productions levels, estimated reserves and costs associated with increased production from the two wells has been provided by Gazprom and have not currently been confirmed by independent geological report, therefor investors are cautioned from relying on this information at this time. The immediate priority following the finalization of this agreement is to complete a detailed geological survey of the area to confirm findings.
One of the key people advising on the joint venture project and the increased oil production will be Mr. Victor P. Philipov, Ph.D. Mr. Philipov is Dean of the geological Faculty of the Gubkin Oil and Gas University in Moscow and is well known for his experience in oil and gas in the Russian Federation. He has over 25 years experience with the Ministry of Oil and Gas where the last position he held was Chief Geologist. During his career he explored and documented geological findings in all regions of the former Soviet Union.
Mr. Wasserman stated that "This is an opportunity for Consolidated Gulfside Resources to become involved in a project with tremendous potential. We are looking forward to finalizing the agreement and developing a working relationship with Start Petroleum as soon as possible. A more detailed and complete feasibility study will be performed to determine the full potential of the property."
It is the intention of the Company to build a significant operating company and the joint venture with Strat and Gazprom is definitely a major move in that direction.
Strat Petroleum's corporate strategy is to build on the strong contacts and relationships management and other team members have in the Russian Federation in the oil and gas industry. Through these relationships they will build strong asset value through the acquisition of oil and gas properties with proven reserves. The Company will invest in the development of the fields through direct investments or in the establishment of joint ventures. The Region of Orenburg, Russia is one such opportunity.
Consolidated Gulfside Resources Ltd. has been actively engaged in seeding out and looking at possible joint ventures in the oil and gas industry. The Company's primary operating philosophy is to locate and develop oil and gas reserves.
17,619,362 Shares outstanding
Consolidated Gulfside Resources Ltd.
Mrs. Maureen Espin
Investor Information
(905) 790-6048
(905) 790-7582 (FAX)
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