North American Petroleum Plc/ Index: ISDX / Epic: NAPP / Sector: Oil & Gas
25 April 2014
North American Petroleum Plc (`NAP' or `the Company')
Update on Zink Ranch Project, Oklahoma
North American Petroleum Plc, a company focussed on developing its interests in
proven US onshore oil and gas formations, notes that Northcote Energy Ltd (AIM:
NCT), its partner and operator of the 1,520 gross acre Zink Ranch Project (`the
Project') in Oklahoma has today announced that two wells on the Project in
which NAP has a 30% working interest have been recompleted with results
expected shortly. These are the first of a 14 well recompletion programme
planned for 2014 which is targeting a substantial increase in production at
Zink Ranch. This update is in line with NAP's strategy to rapidly build net
production and reserves through the acquisition and development of leases in
liquids rich hydrocarbon plays.
NAP's Managing Director Stefan Olivier said, "These two recompletions
kick-start what promises to be a high impact, low cost development programme at
Zink Ranch which will see a total of 14 existing wells recompleted and the
drilling of at least two new wells in 2014. With a 30% working interest in each
of these wells, the potential to transform NAP's production profile is clear.
In addition, as all existing wells are currently producing from just one
formation, successfully recompleting these in new payzones will result in a
substantial increase in NAP's proven reserves, which currently has a PV10 of
US$21 million based on NAP's interest in previously announced acquisitions. I
look forward to receiving the results of the first two recompletions shortly as
well as further updates on the continuous work programme at Zink Ranch."
Northcote Energy Ltd's full release
Northcote (AIM: NCT) is pleased to announce the following update on its Zink
Ranch Project, located in Osage County, Oklahoma.
* First two recompletions completed (55% working interest and 45.45% net
revenue interest) - initial production rates will be provided in due course
* Further 12 recompletions scheduled during 2014 at Zink Ranch
* The recompletions provide access to new production at low cost as they
involve perforating a new, untapped payzone from an existing well bore
* Northcote has had its cost for these two recompletions carried by North
American Petroleum Plc under the farm-out agreement announced 14 March 2014
* These recompletions are the first two of 31 planned workovers or
recompletions scheduled for in the 2014 continuous work programme across
all projects
Northcote's Chief Executive Officer Randall Connally said, "The initial two
recompletions at Zink Ranch went very well from a technical and execution
standpoint. In the Zink Ranch recompletion programme we are entering existing
well bores and perforating and often fracking additional, previously
unexploited zones we believe to be prospective for oil and gas. In some cases
we will produce from existing zones as well as the newly completed objectives.
The incremental production will therefore represent new previously untapped
resources. This is a direct increase in value for the Company and with 12 more
wells to re-complete in this manner we expect this one programme to make a
material contribution to our 250 BOE/d goal. We look forward to initial results
from these first two recompletions, and will report results to the market in
due course."
The operator at Zink Ranch, Glenn Supply, has conducted two recompletions at
the B-8 and the B-13 wells on the Zink Ranch acreage. The B-8 well was
originally completed in the Bartlesville formation but the well bore has been
recompleted in the very promising Skinner section, a zone which has been newly
perforated by the recompletion. This zone received a light frack to transport
the sand propant deeper into the formation. The B-13 well was recompleted and
fracked in the Bartlesville Sand formation.
**ENDS**
For further information and the full Admission document visit
www.napetroleum.com or contact the following:
Stefan Olivier North American Petroleum Plc +44 (0) 7595 779520
Brinsley Holman Keith, Bayley, Rogers & Co. +44 (0) 207 464 4090
Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177
Lottie Brocklehurst St Brides Media and Finance Ltd +44 (0) 20 7236 1177
Notes
North American Petroleum Plc acquires leases in producing onshore US formations
such as the Mississippi Lime, Oklahoma, where the application of new techniques
and technologies such as horizontal drilling and fracture stimulation can
dramatically improve recovery rates. Revenues generated out of production are
reinvested into both new wells and into the acquisition of additional leases to
build a portfolio of producing and undeveloped assets focussed on lower risk
oil rich plays. To date, NAP has acquired 1,523 net mineral acres in the
liquids rich Mississippi Lime play and has interests in 31 producing wells and
a further eight either drilling or waiting to spud. The value, as determined by
an independent appraisal of NAP's proven reserves currently stands at US$21m
and is broken down as follows:
1. PV10 of US$6.7m (as of 1 November 2012) for NAP's 28.7%/21.65% working/net
revenue interest in the Steele and Steinberger wells in Osage County
Oklahoma
2. PV10 of US$10.064m (as of 1 November 2012) for NAP's 24.2%/16.8% working/
net revenue interest acquired in the Little Drum Unit in Osage County,
Oklahoma
3. PV10 of US$4.29m (as of 1 September 2013) for NAP's 30%/23% working/net
revenue interest acquired in the Mathis Unit in Osage County, Oklahoma