PrimeGen Energy has acquired a 100% interest in the oil & gas properties from Russian corporation Seneko Holdings Ltd. The project area has all the characteristics that match PrimeGen Energy’s operating asset strategy of high-value and reasonable risk that, if commercially viable, will allow PrimeGen Energy to become a gas producer in 2009 with long-term cash flows that provide a strong platform for growth.
The project has the potential to contain over 30 BCF gas. The company has very high expectations for the project and has a 100% interest in the area lands, but is subject to a 5% overriding royalty on future production. The property area has significant engineering completed on it which includes 2D and 3D seismic across multiple target locations including several rock formations with gas shows. It is these specific locations that are being scrutinized in the selection procedures as potential well locations for the 2009 drilling program. The targeted locations are in close proximity to producing gas wells, pipelines and operating infrastructure.
PrimeGen Energy believes there is a high probability of success for the completion of commercially viable gas wells on the project lands. Analog production from nearby wells in the area is currently 2,000 to 3,000 Mcf per day and the data profile of the company’s current targets indicate that a similar level of success is a reasonable expectation.
