Admiral Bay Reports Signing $5.75 Million Farmout Deal in Kansas
02 July 2009 - 3:14AM
Marketwired
Admiral Bay Resources Inc. (TSX VENTURE: ADB) ("Admiral Bay" or the
"Company") is pleased to report it has signed a farmout agreement
with Euramerica Energy Inc. of Brescia, Italy to drill 25 wells in
2009 and 25 wells in 2010 in the Thayer and Mound Valley projects
for a total commitment of $5.75 million. Euramerica will pay all
the costs of drilling and completing the wells for a turnkey fee.
Upon connection to the pipeline, the Company will retain a 20%
working interest and be operator and Euramerica will earn an 80%
working interest in each well. Euramerica earns only the wellbore
and associated spaced land for each well it funds. Assuming average
gross gas reserves of 150 mmcf per well as based on the Company's
2008 reserve report, the 20% carried interest would add 1.5 bcf to
Admiral Bay's proved producing reserves for the wells drilled under
the farmout. In addition, up to 50 proved undeveloped locations
could be added to Admiral Bay's reserve base or up to 7.5 bcf
depending on the locations agreed upon, all at no cost to the
Company. The Company expects drilling to commence within 60 days
once Euramerica has completed its funding. The location of the
wells is to be determined by the Company and Euramerica.
President and CEO Steven Tedesco commented "This deal allows us,
on a carried basis, to grow production and continue to prove up
additional reserves in this difficult financial environment without
incurring additional debt. This deal along with our recently
announced acquisition of the Thayer project show our commitment to
growth during this down cycle in the natural gas business so that
we are well positioned when the price environment turns in the
future. The level of commitment by Euramerica shows the quality of
our asset base and we look forward to working with them to increase
production, cashflow and proved reserves."
Admiral Bay Resources Inc. (www.admiralbay.com) is an emerging
unconventional gas production company focused on the development of
projects in the Cherokee Basin in southeast Kansas and the
Appalachian Basin in Pennsylvania. Admiral Bay is listed on the TSX
Venture Exchange under the symbol ADB.
Statements in this release that are not historical facts are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Readers are cautioned
that any such statements are not guarantees of future performance
and that actual developments or results may vary materially from
those in these "forward-looking statements".
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release
Contacts: Admiral Bay Resources Inc. Steven Tedesco President
& C.E.O. (303) 350-1255 (303) 617-8956 (FAX)
stedesco@admiralbay.com Admiral Bay Resources Inc. Robert Carington
CFO (303) 350-1255 (303) 708-1861 (FAX) rcarington@admiralbay.com
www.admiralbay.com
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