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Gold/Mining/Energy : Centurion Gold --CGHI-- -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (333)	10/25/2005 8:39:25 PM
From: RealMuLan	Read Replies (3) \| Respond to of 460

Oil and ore firms pair up to prospect (10-22-2005) COOK INLET: Escopeta Oil Co. and Centurion Gold Holdings join forces. By KAY CASHMAN Petroleum News Published: October 22, 2005 Last Modified: October 25, 2005 at 10:59 AM A mining company is partnering with an independent oil company to prospect for oil and gas in Cook Inlet. "We think we have a possible total resource of 1.2 billion barrels of oil and 7 trillion cubic feet of gas," said Danny Davis, president of Escopeta Oil Co. The Houston-based independent has snagged a partner willing to take majority ownership in its 130,000 acres under lease in Cook Inlet, providing the money Escopeta needs to drill five exploration wells in the next two years. The drilling will require that a jack-up rig be brought into the Inlet. The Murkowski administration has called for state funding to help bring in such a drilling rig to stimulate exploration. The state Senate inserted $6 million into the budget for the effort, but that money later was removed. Escopeta's partner is Johannesburg, South Africa-based Centurion Gold Holdings Inc., a junior gold mining company. Centurion chief executive Dale Paul said Escopeta will operate the leases, which include the offshore Kitchen prospects and the onshore North Alexander prospect. The companies believe the Kitchen prospects could contain the Inlet's missing giants -- large oil and gas fields that remain to be found in Cook Inlet, as postulated by the U.S. Department of Energy in its 2004 report on Cook Inlet natural gas. Paul said well permitting will be initiated "almost immediately." The game plan is to bring the jack-up rig to drill Kitchen next year and in 2007, Davis said. The North Alexander drilling would happen in the winter of 2006-07 using a conventional rig. Centurion said probable reserves from the Kitchen prospects are 8.2 trillion cubic feet of gas and 1.4 billion barrels of oil. If oil and gas are discovered, the amount actually produced would be less than those totals. Although Cook Inlet is believed to hold quite a bit of undiscovered oil and gas, the amount that is known to definitely exist is expected to be depleted quickly in the coming decade based on current consumption patterns. "We could actually supply the state with enough gas for quite a few years to come. They had better hope we're right," Davis said. Jack-up rigs are relatively popular for offshore exploration because they can be cheaper to use and move. When the rig is positioned at the drill site, its legs are jacked down to the seabed and the hull is jacked up above the water's surface, according to a textbook on the oil industry. "My most important job in the next couple of weeks is to find a jack-up rig," Davis said. "When we looked at moving a jack-up to Alaska three to four years ago the mobilization and demobilization cost was $4 million. The same bid today is at least $12 million." The "upside for the contractor that moves a jack-up to Alaska is fantastic," Davis said, referring to the companies that have expressed interest in getting a jack-up in to drill offshore Cook Inlet wells, including Conoco Phillips, Forest Oil and Prodigy Oil and Gas. Davis plans to approach Gov. Frank Murkowski for money to help move a jack-up rig to the Inlet. The Cook Inlet deal will be Centurion's first venture into the oil and gas sector, Paul said. The company said its management saw the deal with Escopeta as "an unprecedented opportunity to develop major oil and gas reserves in Alaska at a time when prices make it attractive to enter the oil and gas business. ... Management believes that the Cook Inlet agreement opens up new financial frontiers for the shareholders of Centurion and, if successful, could possibly make Centurion one of the stronger independent oil companies in the United States." adn.com