Bearcat issues notice of default to Turner Valley well operator
Bearcat Explorations Ltd BEA
Shares issued 59,317,078 Jan 4 close $0.23
Tue 5 Jan 99 News Release
An anonymous director reports
On Dec. 14, 1998, the farmor group (Stampede Oils, Bearcat Explorations,
Curlew Lake Resources and Panda Petroleums) in the Turner Valley North
farm-in block in southwestern Alberta, delivered a notice of default to the
operator/farmee of the IMP Berkley Turner Valley 2-21-21-3 W5M discovery
well, as provided for in the governing seismic option agreement dated Dec.
18, 1996.
The operator/farmee has breached numerous obligations in conducting the
discovery well operation related to pertinent conditions of the
aforementioned governing seismic option agreement. The only alternative to
the serving of this notice of default would have been for the farmor to
tolerate apparent never ceasing and continuing delays perpetrated by the
operator/farmee in having the 2-21 well completed and eventually having it
placed on production in a reasonable time frame.
As requested subsequently by the operator/farmee, a meeting was held on
Dec. 16, 1998, et which time Stampede, on behalf of the farmor, recommended
that it take over and complete the well in accordance with good oilfield
practice in order to have it put on production in the near future. The
response to this was negative.
The operator/farmee has 30 days from receipt of the notice of default to
commence to remedy such defaults and thereafter must diligently continue to
remedy them. The farmor is hopeful that this notice will provide the
impetus whereby the current operator will endeavour to have the 2-21 well
put on production in accordance with good oilfield practice.
However, should the operator/farmee not remedy or attempt to remedy the
defaults, as provided for in the seismic option agreement, the
operator/farmee's right to earn an interest in the 2-21 discovery well and
all related petroleum and natural gas (P&NG) leases, totalling
approximately 5,220 gross acres, will terminate.
In that event, Bearcat and its partners will take all steps necessary to
have the 2-21 well completed in accordance with good oilfield practice and
subsequently placed into production early this coming year. Stampede's
interest in this well, and in the other P&NG leases, would increase
significantly from the after pay out 11.125 per cent interest currently
provided for in the seismic option agreement.
The farmor group is holding discussions with other sizeable oil and gas
exploration companies regarding participation in the balance of the Turner
Valley P&NG leases. Such an involvement would definitely include a working
interest arrangement in the Turner Valley north farm-in block.
A comparative analysis relating to the logistics of oil versus gas
production from the Mississippian Turner Valley formation demonstrates that
an oil well in this project should pay out all drilling and completion
costs in an eight-month period at an unlikely low oil price of $7.00 (U.S.)
per barrel.
A revised interpretation of the indicated Turner Valley Devonian Crossfield
gas pool delineates in excess of three trillion cubic feet of potential
(probable) recoverable gas reserves. With regard to other exploration and
development areas, the company plans to have certain development projects
under way early in the New Year, along with the commencement of significant
revenues. The advent of substantial new revenues in early 1999, coupled
with additional exploration/development drilling will ensure that the
asset/market value of the company should escalate significantly.
The company recently completed a private placement of 4,260,000 shares at
40 cents per share, the proceeds of which are for its share of current and
continuing activities in the Turner Valley project. These shares are
subject to a one year hold period.
(c) Copyright 1999 Canjex Publishing Ltd. canada-stockwatch.com |
