SPRL -- Strat Petroleum Continues Aggressive Pace of Acquisitions
TORONTO, Jun 01, 2006 (MARKET WIRE via COMTEX) -- Strat Petroleum, Ltd. (PINKSHEETS: SPRL), an emerging exploration and development company focusing on oil and gas properties in the Russian Federation, today announced that its joint venture entity Strat Nafta Ufa (SNU), has acquired additional reservoirs totaling 250,000 metric tons in the Republic of Bashkorstan.
"Seeing the lucrative nature of this highly specialized niche, several European institutional entities are now in advanced negotiations with our joint venture to establish a new partnership for the purpose of investing in processing equipment," said Sam Hyams, CEO of Strat Petroleum, "and within weeks, the agreements and financing should be completed." Initial indications are for an investment of at least $10 million for the additional purchase of sludge and sludge processing equipment.
Encouraged by the indication of institutional support, Strat has broadened its base for the acquisition of oil sludge reservoirs by establishing a joint venture in the Republic of Tatarstan. Tatarstan is the third largest producer of oil, and Tatneft, the regions largest oil producer, has a stable annual production of approximately 170 million barrels of oil. Its largest refinery processes 25 million barrels per year, and consistent with the age of similar refineries in the Russian Federation, efficiencies range at 75%-80% recovery at best. This still leaves about 20%-25% unprocessed product that will again be disposed in oil sludge reservoirs as the refineries focus on refining crude oil which is their main line of business rather than on further refining sludge reservoirs.
In the company's efforts to generate revenues and cashflows immediately, an agreement with a local processor is being negotiated to supply up to 3600 metric tons per month of sludge.
Based on current market prices in the Russian Federation, the total reserves acquired have the potential to generate over $165 million over the next three to five years.
"We are very excited to report that along with these acquisitions, Strat and its joint venture entities have all the required Government approvals to construct processing plants directly at the sludge reservoir sites," said Sam Hyams.
Strat Nafta Ufa (SNU) reserves now total in excess of 1,000,000 metric tons with an official market value of approximately $80 per metric, valuing the reserves acquired at approximately $80 million. Strat Petroleum, in conjunction with its joint venture entities, will continue its discussions with the various Government agencies and regional refineries to acquire an additional 1 to 2 million metric tons of reservoirs.
About Strat Petroleum:
Strat Petroleum is an emerging exploration and development company focusing on investment in oil and gas properties and other related projects in the Russian Federation. For more information, please visit the company website at www.stratpetroleum.com. The company's new phone numbers are: 905-761-9169 (main), 416-628-8018 (fax) and 646-216-9751 (U.S.).
905-761-9169 (main)
416-628-8018 (fax)
646-216-9751 (U.S.)
www.stratpetroleum.com
SOURCE: Strat Petroleum, Ltd.
CONTACT: stratpetroleum.com
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