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PrimeGen Energy Corp. is pleased to announce it has entered into an agreement with Moscow-based resource management corporation Kozik Energy Ltd. whereby PrimeGen has secured a first right of refusal to purchase 40% of Kozik ' working interest in a large, oil production play located in Timan-Pechora Basin, Russia.
Kozik has signed a Memorandum of Understanding ("MOU") with the vendor thereby securing PrimeGen's interest in the play subject to the results of an ongoing due diligence assessment. It is anticipated that a formal purchase and sale agreement will be executed by all parties within approximately 10 business days.
The Timan-Pechora Project area currently consists of 24 existing production oil wells with close to one billion barrels and 132 BCF of proven reserves. A discovery well tested 5,589 BOPD from zone at 3,958-3,974 meters. Timan-Pechora region is 17 kilometers from Ukhta, a major town in the Republic of Komi. The oil plays are situated approximately 1,200 km from Moscow. Its surrounding areas have well-established infrastructure, allowing all year access for field operations. Power lines and a major highway pass through the territory. There is also a branch of the Transneft pipeline between Ukhta and Moscow that passes directly over the project. Additional transportation routes include a railway system, with the nearest terminal located close to Ukhta.
PrimeGen President Robert Charlton states, "We are very pleased to be participating in our first production scenario. An expedited tie-in of these wells will make PrimeGen a cash flow positive Company in very short order and move us forward towards our mandate of increased production in 2009."
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