RockBridge Resources announced Wednesday it has agreed to joint venture up to five Alberta oil and gas projects with Crimson Energy, of Calgary, through farm-out or purchase.
The projects are low risk, near production opportunities and most involve completed wells presently tied in or near tie-in points, all containing producing zones indicated to have by-passed production.
In connection with the joint venture, RockBridge is pleased to announce that Michael J. O'Byrne of Calgary has been appointed the CEO and a director of the Company. O'Byrne, currently a Vice President of Crimson, has more than 16 years of wide ranging experience in oil and gas exploration, production and management.
The joint venture projects include Crimson's 100 percent working interest in a Violet Grove area gas property, in which RockBridge, to earn 50 percent, is to pay 100 percent of the costs, estimated at $300,000, to frac, test and equip the existing well and tie it in to the gas gathering system servicing sweet gas production in the area. Estimated initial production from this project is at 500 mcf/ per day with a net to the 50 percent interest of approximately 25 barrels of oil equivalent per day, or 25 BOEPD.
A second project is the acquisition of Crimson's 12.5 percent working interest in two sections in the Wapiti area, in which the operator is in the process of re-completing the existing well for the production of condensate rich natural gas. The price for this interest is $450,000 or such lesser amount as determined by professional reservoir engineers and shall be paid by RockBridge shares issued at $0.05 each. The estimated initial production from this interest, after the $63,000 share of re-completion expenses, is 650 mcf/per day with 26 barrels per day of condensate, which is the equivalent of approximately 17 BOEPD.
RockBridge, in order to finance these first 2 projects, is proceeding with a non-brokered private placement financing of up to $400,000 in flow-through units, subject to regulatory approval. Each unit is priced at $0.05 each and consists of one flow-through common share and one-half warrant, with each whole warrant exercisable for two years for one non-flow-through share at $0.15 each. Finder's fees, subject to regulatory approval, of 8 percent will be paid to investment dealers or other qualified finders, and 8 percent brokers' warrants to brokers, with each warrant exercisable for two years for one regular share at $0.15.
The farm-in for the Violet Grove area project above includes an opportunity, subject to further financing, to farm-in to a further larger project, consisting of a test well, whereby RockBridge would pay 25 percent share of drilling and casing costs through the completion to earn a 15 percent interest.
Two additional joint venture projects are opportunities that participation will be made available to RockBridge once further work has been completed by Crimson.
The joint venture farm-out and acquisition projects described about with Crimson are subject to completion of due diligence, formal documentation and regulatory approval.
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