re: Valkyries Petroleum VPC.V C$15.30
Valkyries Acquires Interest in Komi Oilfield
Monday May 8, 10:12 am ET biz.yahoo.com
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 8, 2006) - Valkyries Petroleum Corp. ("Valkyries" or the "Company") (TSX VENTURE:VPC - News) is pleased to announce that it has signed a binding agreement to purchase a 50% interest in the North Irael Field in the Komi Republic in the Russian Federation. Under the terms of the agreement, RF Energy Investments Limited ('RF Energy"), which is owned 50% by the Company and 50% by partner Arawak Energy Corp., will acquire all of the shares of LLC NK Recher-Komi ("Recher") which holds a 100% interest in the North Irael Field. Under the terms of the agreement, RF Energy will pay US$18 million to acquire the shares of Recher. The transaction is subject to all requisite regulatory approvals including the Russian Anti-Monopoly Agency. Closing of the transaction is expected before the end of June, 2006.
The North Irael Field is located on trend and approximately 10 kilometres from the Sotchemyu-Talyu fields owned 100% by RF Energy's wholly owned subsidiary ZAO PechoraNefteGas ("PNG"). Please see attached map. The North Irael Field is currently producing approximately 400 barrels of oil per day ("bopd") from the same Devonian reef horizon that is productive at Sotchemyu-Talyu. There are 6 wells in the North Irael Field that have tested oil and gas with 4 of these wells currently on natural flow production. The depth of the reservoir is 1,800 to 1,900 meters and the oil quality is 29.7 degrees API. Preliminary estimates of the proved and proved plus probable reserves as of December 31, 2005 from a report being prepared by independent reserve auditors Ryder Scott Company, L.P. in accordance with NI 51-101 gross to Recher are respectively 1.5 and 4.8 million barrels of oil. Net present value of future revenues for proved and probable reserves before income tax, based on constant prices and costs and discounted at 10% is estimated to be US $36.5 million. The production license for the block, which comprises 76 square kilometers, was awarded in 2000 and expires in January of 2021.
The short term plan for the field is to workover wells and install lift on all 6 wells which the company believes will increase production to over 1200 bopd. The oil will be transported initially by truck over the short 35 kilometer route to PNG's existing processing facilities and sold through the pipeline system. The Company believes that the Recher operation can be incorporated into PNG's existing Komi operation at minimal incremental cost. Additional development is also planned for the second half of 2006.
Valkyries President and CEO Keith Hill commented, "This is an excellent acquisition for Valkyries as it will provide immediate production and cash flow in today's high price oil environment. It is a very good fit with our current Komi project and we will aggressively pursue production acceleration over the coming year."
Valkyries Petroleum Corp. is an upstream oil and gas company with exploration and producing interests in the Russia and is currently in advanced stages of evaluation and negotiation on several additional projects in Russia.
Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and management's capability to execute and implement its future plans. Actual results may differ materially from those projected by management.
ON BEHALF OF THE BOARD
Keith C. Hill, President
NOTE: To view the map associated with this release, please click the following link: ccnmatthews.com
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Contact:
Sophia Shane
Valkyries Petroleum Corp.
Corporate Development
(604) 689-7842
(604) 689-4250 (FAX)
www.valpete.com |
