FIELD ACTIVITIES / Carpatsky Petroleum signs Agreement with Torch Ener
1998-01-15
CALGARY, ALBERTA
THE BOARD OF CARPATSKY IS PLEASED TO ANNOUNCE:
Carpatsky Petroleum, Inc. (ASE:KPY) has signed an Administrative Services
Agreement with Torch Energy Advisors, Inc. of Houston, Texas (Torch). The
agreement was made by Carpatsky in order to strengthen western management
over its two Ukrainian field development projects. In addition to providing
Carpatsky with experienced financial, technical and administrative personnel
on an as needed basis at reasonable costs, Torch has also provided Carpatsky
with up to a Can. $1 million short term, interim loan and made a commitment
to assist Carpatsky and its financial advisor, Proteus International, to
raise equity capital for its Ukrainian operations.
Proceeds of the Torch loan were immediately used to run and cement casing in
Carpatsky's first two deep gas condensate wells in the
Rudovsko-Krasnozasvodsky field and to pay for drilling costs of three
additional wells. For details see the field operations report below. Subject
to regulatory approval, the loan agreement, among other things, provides for
a conversion of the whole amount loaned (with interest) to common shares of
Carpatsky at US 0.20 per share. The note is at 12% per annum interest and is
payable on March 31, 1998. As further consideration for making the loan, and
subject to regulatory approval, Carpatsky will issue Torch warrants to
purchase up to 2,800,000 common shares of Carpatsky at Can. $0.35 per share
until December 31, 2000.
Under the terms of the Administrative Services Agreement, Torch is obligated
to provide Carpatsky with a Chief Financial Officer and a Chief Operating
Officer and to provide such financial, technical and administrative personnel
as are required. Torch's obligations under the agreement commence upon the
completion of an institutional fund raising by Carpatsky of equity of up to
US $16,000,000 at a per share price ranging from Can. $0.35 to Can. $0.50.
Carpatsky believes that this arrangement with Torch provides it with a high
quality management team and access to a depth of industry expertise and
capital.
Torch Energy Advisors Incorporated, is headquartered in Houston, Texas. It
provides outsourcing services for clients in the energy industry including:
(1) administrative accounting and financial services; (2) upstream and
mid-stream property operations; (3) exploration and exploitation services;
(4) corporate and property acquisitions, due diligence and divestitures; and
(5) hydrocarbon marketing and risk-management. In addition, Torch provides
capital in the form of debt and equity to independent producers for
acquisition and development opportunities through Torch Energy Finance
Company. Since 1981, Torch's clients have included insurance companies,
corporate and public pension funds, foundations, endowments, foreign
investors, and public oil and gas companies. Torch has more than $1.5 billion
in assets under management.
The following chart is a summary of activity in the Rudovsko-Krasnozasvodsky
field as of January 14,1998. Carpatsky initially has a 50% working interest
and a 40% net revenue interest in the field.
PROPOSED DEPTH
WELL TD ON JAN. 14 OPERATION
#102 5792 meters 5792 meters Waiting on See details
completion below
#104 5800 meters 5252 meters Waiting on
Barite
#106 5150 meters 5150 meters Waiting - 5 See details
casing below
#109 5200 meters 4576 meters Drilling ahead
#111 5200 meters 4393 meters Drilling ahead
#100K 5500 meters 0 Waiting on
orders to spud
Well No. 106 has been drilled to a total depth of 5150 meters and 5 1/2 inch
casing was set and cemented through the major B-22 reservoir. A further 2,500
meters of 5 1/2 inch pipe is needed to tie it back to the surface. Electric
logs indicate 117 feet (34.87 meters) of net, effective pay zone. That same
zone in the adjacent offset well (No. 103) located about 2200 feet to the
north, is 38.7 feet thick and initially produced at a rate of 6.8 million
cubic feet per day and 120 barrels of condensate per day. In the offsetting
well to the south (No. 4) that zone has 135 feet of net pay and initially
produced at a rate of 12.8 million cubic feet of gas per day and 240 barrels
of condensate per day.
Well No. 102 has been drilled and cased to a total depth of 5792 meters
(19002 feet) and is the deepest well to be completed in the T-3 horizon in
the field. The T-3 reservoir in an adjacent well (No. 2), located about 2500
feet to the south, produced 38.8 million cubic feet of dry gas per day when
tested from a 9.8 foot interval. Electric logs indicate that Carpatsky's No.
102 has 115 feet of net pay from that same reservoir.
In the Bitkov oil field, Carpatsky's second area of operations, the company
has two oil wells producing 63 barrels of oil and approximately 300 mcf of
associated gas per day. Two additional producing wells are temporarily shut
in and are awaiting the repair of production facilities and a gas lift supply
line, and two other recently perforated wells will be put on production as
weather permits.
For further information contact:
Mr. Dan Patience
Noble House Investments, Inc.
Suite 2010, 444-5th Avenue S.W.
Calgary, Alberta T2P 2T8
Telephone: 1 (800) 499 2388 or (403) 262 7111
Fax: (403) 266 5732
Leslie C. Texas, President
Carpatsky Petroleum, Inc.
6671 Southwest Freeway, Suite 303
Telephone: (713) 777 6301
Fax: (713) 981 8670
Houston, Texas 77074 |
