Apex Says Drilling to Begin in Beaufort Sea/Mackenzie Delta

Mackenzie Delta Area, Northwest Territor
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Apex Resources Group Inc. announced that, after a twenty-year quiet period, drilling is beginning in the Beaufort Sea/Mackenzie Delta area where in June 1997, Apex Resources Group Inc. purchased a 3.745% working interest in the Beaufort Sea Area Well known as Itiyok 1-27 consisting of 640 acres containing reserves of 108 billion cubic feet of gas and recoverable oil reserves of 8.976 MM barrels. The best current estimate of the total discovered resource in the basin is 1.01 billion barrels of oil and 9.00 trillion cubic feet of gas according to the National Energy Board of Canada.

With oil ranging at $50.00 per barrel and gas close to $7.00 per 1,000 cubic feet, Apex interest in proven reserves would be 45 Million Dollars and with an additional potential to be drilled out would represent 323 Million Dollars. Once the pipeline is completed and on-line, it will be a tremendous cash flow to Apex Resources Group Inc.

Devon Energy announced on December 2, 2004 that the Company is spending $ 60 million in its first year of its planned drilling program in the Beaufort Sea. In a comprehensive report filed with the National Energy Board of Canada, on nine potential drilling locations and a 10th location the island of Mason Bay are planned.

At the same time, another partnership consisting of Chevron Canada Resources and BP Canada Energy plans to lead off this winter's program in Canada's North that could see up to a dozen wells drilled. The partners are two of seven companies making up the Mackenzie Delta Explorers Group, which has collectively committed to spending C$900 million on exploration licenses. Having already barged equipment and supplies to the drill site, operator Chevron hopes by December 21 to spud the exploratory Olivier H-1 well, about 60 miles northwest of Inuvik, Northwest Territories. Chevron stated (Petroleum News - December 2004) that the company is encouraged that progress is being made on the Mackenzie Gas Project.

Major energy companies have returned to the area that was a hotbed of drilling in the 1970's and 1980's but has not had a new well drilled in approximately twenty years. At the height of the boom, the area was so busy its biggest operator, former Canadian oil giant Dome Petroleum Ltd., had 1,500 to 2,000 workers on site, ran the world's largest fleet of Arctic vessels to drill wells that cost between $50 million and $100 million each, and even operated daily Boeing 737 flights for crew connections and cargo rotations. The largest energy companies now see the promising potential for multiple trillion-cubic-feet natural gas discoveries.

Other oil companies like ChevronTexaco Corp., Imperial Oil Ltd., and ConocoPhillips were also active, benefiting from Petroleum Incentive Payments that paid 55% of frontier exploration expenses for Canadian oil and gas companies. However, companies were looking for oil, while the Arctic's new target is gas.

"Apex Resources Group Inc.'s holdings in the Beaufort Sea/Mackenzie Delta are in the middle of this hotbed of activity. The Alaskan pipeline of the 1970's read like a Greek tragedy. However, Apex Resources' holdings, promises to be an excellent investment opportunity, and are becoming reality. You could say that the Alaska Black Gold Rush is on!" stated John Hickey, Director.

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