As previously announced, EGPI Firecreek and its partner The Sahara Group had been in preliminary discussions with Minneftegazstroi to acquire the leases for five (5) producing oilfields in the southern part of Russia. As talks progressed, three (3) more oilfields had been identified as candidates for the rehabilitation work EGPI Firecreek provides and were added to the final agreement. Ultimately, at the signing of the agreement today in Moscow, Russia, a total of nine (9) oilfields had been identified in the final agreement.
The agreement calls for the rehabilitation of the producing fields and development of the proved undeveloped fields in Southern Russia. Firecreek Petroleum, Inc. is the wholly owned subsidiary of EGPI Firecreek which is the global Oil and Gas Operating partner for The Sahara Group.
Speaking from Moscow, Russia, Mr. Taylor stated, "This agreement marks a monumental moment for Firecreek and its partner, The Sahara Group. A tremendous amount of hours and hard work have gone into this project in order to make this dream a reality. We also expect this agreement to be the first of many additional projects that The Sahara Group, EGPI Firecreek and Minneftegazstroi will be finalizing in the very near future."
Mr. Taylor confirmed that specific reserve data on the nine Russian oil fields in the Krasnodar Krei area of Southern Russia wasn't immediately available. However, a preliminary assessment of the fields by the Institute for Geology and Development of Fossil Fuels show that they will significantly increase EGPI Firecreek's oil reserves in Russia. This agreement also consolidates the multi national consortium's holdings around the Black Sea. EGPI Firecreek is expected to be the principal financial working interest investor in these programs.
The Minneftegazstroi President, Dr. Genady I. Shmal, and General Director, Yahya Alibekov stated that they are also looking to develop a joint venture with The Sahara Group and EGPI Firecreek around Southeastern area of Russia in the Stravopol and Astrakhan areas. The consortium also expressed the intention to develop a Black Sea petroleum processing and shipping facility in the Krasnodar Krei area to treat, process and export oil and high-end liquids.
Mr. Taylor and Minneftegazstroi General Director Yahya Alibekov met with Dr. Evgeny B. Grunis, General Director of the internationally renowned Russian Institute for Geology & Development of Fossil Fuels and his senior staff. Dr. Grunis, a legend in the oil business who is credited with substantially building the Russian petroleum industry and his team of experts, agreed to conduct a detailed technical review of all nine fields. This information will then be reviewed and certified by a major independent third party engineering firm. At that time, a comprehensive, long-term operational program will be prepared by the EGPI Firecreek Geo-Science team. This comprehensive report will outline the required development program and the anticipated oil production with each oil field.
EGPI Firecreek Inc. through its Firecreek unit is focused on oil production with an emphasis on acquiring existing oil fields with proven reserves, the rehabilitation of potentially high throughput oilfields, resource properties and inventories on an international basis. Other companies in the oil sector include Marathon Oil Inc. (MRO), Pantina Oil and Gas Inc. (POG), Frontier Oil Inc. (FTO) and Cabot Oil and Gas Inc. (COG).
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