Osprey Energy to acquire northern Louisiana property
Osprey Energy Ltd OEL
Shares issued 5,334,288 Oct 23 close
$1.40 Tue 24 Oct 2000 News Release Mr.
R. Gary Malone reports The Canadian Venture Exchange has accepted and
approved documentation filed for the purchase of a northern Louisiana oil
and gas property. Osprey has a 75-per-cent working interest before payout,
which reverts to 50 per cent after payout, as disclosed on Aug. 29,
2000. The independent engineering report states the proved reserves in
this property, net to Osprey's 50-per-cent interest, are valued in
excess of $29-million (U.S.). These figures were compiled valuing oil at a
price of $30.84 (U.S.) per barrel and natural gas at $5.19 per
thousand cubic feet. Osprey receives an additional 20-per-cent premium
for the gas produced because of its high British-thermal-unit content.
This property, which exceeds 20,000 acres in four parishes (counties),
has nine Austin Chalk wells, each with a total depth in excess of 18,000
feet, three Cotton Valley wells, each with a total depth in excess of
14,000 feet and one salt water disposal well. The prior owner, Union
Pacific Resources, drilled, completely equipped, and tied in 12 of the
wells to existing pipelines in 1997 and 1998. One well, the Crosby 36A,
was drilled in 1998 and tested at over 500 barrels of oil a day
and over five milion cubic feet of gas a day but was never equipped, tied
in or produced. The company's operator, BPR Energy, is finalizing the
work schedule to tie this well into the Crosby 25, where it will be
produced using the equipment infrastructure and pipelines already
located on the Crosby 25. The three Cotton Valley wells are on the east
flank of the prolific Vernon field in Jackson parish, where
Anadarko, which purchased Union Pacific Resources in May, 2000, operates
the balance of wells in this field. It purchased these interests
for a price of $38-million (U.S.) in 1999. Anadarko also owns a
50-per-cent interest in the company's T.K. Giddens well in this
field, which it operates. The company's other two wells in this field,
the pool is producing about 60,000 cubic feet a day, while the Willamette
well will undergo remedial work in late November prior to going into
production. The company commenced production in late August on five of the
Austin Chalk wells, the Crowell 3, Crowell 7, Bailey 32, Temple 16 and
Crosby 24. Each well, currently choked back until scheduled remedial work
is completed, is producing approximately 40 barrels of oil a day to 60
barrels of oil a day and 150,000 cubic feet a day to 200,000 cubic feet a
day of gas. Production will be increased as the work is completed and
salt water disposal permits are received. Bayou Choctaw An independent
engineering report values Osprey's 60-per-cent working interest in
the proven reserves on the company's Bayou Choctaw field in southern
Louisiana to be in excess of $4.5-million (U.S.) (using $26.96 (U.S.)
per barrel of oil and $2.54 (U.S.) per thousand cubic feet).
Currently, seven wells are each producing approximately 30 barrels of oil
a day. Five additional wells will be brought on production as remedial
work is completed on them. Livingston The Livingston field in southern
Louisiana, with two wells currently producing approximately 40
barrels of oil a day, has an independent engineering report valuing
Osprey's 30-per-cent working interest in the proven reserves to be
in excess of $2.15-million (U.S.) (using $25.60 (U.S.) per barrel of
oil). Louisiana property summary The present value of Osprey's proven
reserves in Louisiana, as evaluated by an independent Houston company, is
in excess of $36-million (U.S.). Alberta properties The company's Alberta
properties, the Jenner Shallow well, 12.9-per-cent working interest
and the Crestar Jenner well, 5-per-cent working interest, are currently
producing approximately 90 barrels of oil a day net to Osprey. This
latest acquisition provides Osprey with a broader and more balanced
portfolio of properties. It assures Osprey's ability to continue to
grow into the future and provide a strong financial return for its
shareholders. The company is continuing to pursue opportunities in the
oil and gas marketplace to enhance shareholder value by
increasing cash flow and building reserves. WARNING: The company
relies upon litigation protection for "forward-looking"
statements. (c) Copyright 2000 Canjex Publishing Ltd.
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