PROPERTY ACQUISITION / Genoil Announces Three Cuban Related
Transactions
OTC Bulletin Board SYMBOL: GNOLF
CANADIAN DEALING NETWORK SYMBOL: GNOL
JULY 23, 1998
CALGARY, ALBERTA--
Genoil announces three Cuban related transactions:
1. Sale of interest in offshore Blocks V, VI and VII.
2. Acquisition of a 70 percent interest in Block 22.
3. Farm-in for a 20 percent interest in Blocks 18 and 21
including a well presently being drilled in Block 21 by Premier
Oil.
Completion of these transactions means that Genoil now holds
interests in approximately 5.3 million gross acres (3.8 million
net acres) onshore in Cuba, pending ongoing work commitments.
1. Genoil has sold its 30 percent interest in offshore Blocks V,
VI and VII to a third party for approximately $10 million which
includes reimbursement of incurred costs. The Company would
prefer to concentrate its exploration efforts onshore as it has no
experience in offshore operations and further believes the play
types on Block 20 and its newly acquired interest in Block 22 are
similar to the offshore prospects. As part of its transaction
with Blocks V, VI and VII, Genoil terminated the 5 percent option
previously granted to St. Genevieve Resources Limited ("SGV") and
also agreed to farm-out a 10 percent interest in onshore Blocks 19
and 20 to SGV. SGV is required to pay its 10 percent share of all
incurred costs in Blocks 19 and 20 or forfeit its interest. If
SGV earns its interest, Genoil will have a 72.5 percent interest
in Blocks 19 and 20.
2. Genoil has agreed to acquire a 70 percent interest and
operatorship of onshore Block 22 in southern Cuba for $700,000.
The Block was previously owned 100 percent by MacDonald Oil
Exploration Ltd. which will retain a 30 percent interest. Block
22 contains several interesting prospects identified on seismic
which have the same potential as the prospects on offshore Blocks
V, VI and VII. The Company will be obtaining additional seismic
on the Block this summer and plans to drill a well in the first
half of 1999.
3. Genoil has agreed to participate in a farm-in on Premier Oil's
Blocks 18 and 21 in eastern and central Cuba. The Company will
earn a 20 percent interest in these Blocks by paying 20 percent of
the costs for 1998 which include a well that is currently drilling
on Block 21. The well is expected to complete drilling in late
August. Genoil has an option to continue in both Blocks after the
well is drilled by paying its 20 percent share of the back costs
associated with the Blocks.
Genoil will hold its Annual General Meeting in Calgary on August
31, 1998. At that meeting Genoil will be seeking shareholder
ratification of the private placement previously announced on
April 9, 1998. The funds from the private placement allow Genoil
to repay its debt obligations to its parent, Beau Canada
Exploration Ltd., and leave Genoil debt free. In addition, upon
completion of these transactions Genoil will have approximately
$11 million in cash to fund its operations including drilling and
seismic programs in Cuba.
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