Doxa Enters Mississippian Oil Play, Oklahoma and Closes Private Placement
08 July 2011 - 10:31PM
Marketwired
Doxa Energy Ltd. (TSX VENTURE: DXA)(OTCBB: DXAEF)(FRANKFURT: 5D0)
("Doxa" or the "Company") is excited to report that it has
exercised its option to acquire a twenty percent (20%) leasehold
interest in an existing project situated in the emerging
Mississippian Oil Play ("Mississippian Oil Play") in Oklahoma.
Under the terms of a previously announced Letter of Intent (see
Doxa news April 27, 2011) with Dynamic Production, Inc., as
amended, the Company was granted the right to acquire up to twenty
percent (20%) interest in existing leases, as well as an ongoing
lease acquisition program primarily in Alfalfa, Garfield, Grant and
Kay Counties, Oklahoma. Dynamic Production, Inc. of Fort Worth,
Texas, is managing the project and has a stated goal of acquiring
approximately 18,000 acres within the play. The play is led by
Chesapeake Energy Corporation, SandRidge Energy, Inc. and Eagle
Energy of Oklahoma, LLC. Doxa estimates that it will ultimately
acquire 3,600 net acres in this round of leasing, at a cost of
approximately US$2,200,000.
John D. Harvison, President and CEO of Doxa stated today that:
"The Mississippian Oil Play is an emerging horizontal play that has
the potential to become one of the most profitable domestic onshore
oil plays today, and as such has the potential of providing
significant growth for Doxa as well as exceptional value for our
shareholders."
According to recent public disclosures by these leading
companies, this play exhibits excellent economics with single well
estimated ultimate recovery projected at 300-500 MBOE and with
drilling and completion costs estimated at US$3.0mil per well. In
recent presentations to various professional associations over the
past months, SandRidge has reiterated that it expects to achieve
over 100% (i)ROR, and a net present value per well of approximately
US$5.9mil, based on recent Nymex strip pricing. Based on current
knowledge of well spacing disclosures from area operators, Doxa
anticipates that up to 72 gross wells may ultimately be drilled on
the acreage block, or 14 wells net to Doxa, based on its twenty
percent (20%) participation level. The Company plans to release
additional information on the proposed acquisition once details are
finalized.
Doxa Energy is also pleased to announce that its previously
reported $2,000,000, non-brokered private placement (see Doxa news
June 13, 2011) has now closed. In addition to initial investment in
the Mississippian Oil Play, proceeds of the placement will be used
to fund the Company's numerous oil and gas projects in Texas. A
total of 5,714,286 units (each a "Unit") were issued at a price of
$0.35 per Unit, raising gross proceeds of $2,000,000. Each Unit
comprised one common share and oneshare purchase warrant. Each
share purchase warrant ("Warrant") entitles the holder to acquire
one additional common share for a period of three years at a price
of $0.475 per share.
John D. Harvison, President & Chief Executive Officer
(i)ROR refers to first year Rate of Return
Statements in this press release other than purely historical
information, including statements relating to the Company's future
plans, objectives or expected results, constitute forward-looking
statements. Forward-looking statements are based on numerous
assumptions and are subject to the risks and uncertainties inherent
in the Company's business, including risks inherent in oil and gas
exploration and development, and uncertainties in connection with
anticipated commodity prices for oil and natural gas, growth of
worldwide market demand, exploration capital requirements, length
of asset life and availability of qualified personnel, among others
As a result, actual results may vary materially from those
described in the forward-looking statements.
All references in this press release to BOE are based on a 6 Mcf
to 1 Bbl conversion ratio. BOE's may be misleading particularly if
used in isolation. A BOE conversion of 6 Mcf to 1 Bbl is based on
the energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead. One MBOE is defined as one thousand barrels of oil
equivalent.
This new release does not constitute an offer to sell or the
solicitation of an offer to buy any securities of the Company in
the United States. The securities of Doxa have not been registered
under the U.S. Securities Act of 1933, as amended, or any state
securities laws, and may not be offered or sold in the United
States or to or for the account or benefit of a U.S. person unless
so registered or pursuant to an available exemption from the
registration requirements of such Act or laws.
Neither TSX Venture Exchange nor its Regulation Services
providers (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Contacts: Doxa Energy Ltd. Scott Parsons Director 604-662-3692
Doxa Energy Ltd. Paul McKenzie Director 604-662-3692
info@doxaenergy.com www.doxaenergy.com
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