TG World Energy Forms JV for North Slope Exploration
TG World Energy has entered into a joint venture agreement with Brooks Range Petroleum Corporation a wholly owned subsidiary of Alaska Venture Capital Group, LLC, effective March 18, 2006, subject to finalizing the joint operating agreement in ten days.
JV Established on Almost All BRPC/AVCG's Alaska North Slope Properties
--Property interests acquired upon formation of JV
Under the terms of the JV, TG World has acquired an interest in almost all of BRPC/AVCG's existing and recently awarded oil and gas leases, located on the Alaska North Slope and has agreed to participate with BRPC/AVCG in the exploration and development of these properties. The areal extent of leases covering these properties is approximately 167,033 net acres.
Exploration Strategic Alliance Formed Covering Large AMI Area on North Slope
The parties have also entered into an exploration joint venture alliance respecting a more extensive exploration and development program on a large designated area containing all other State of Alaska governed petroleum leases onshore and offshore the North Slope between the NPRA in the west and the ANWR in the east and in which BRPC/AVCG currently has no petroleum lease ownership. This will provide an area of new venture opportunity for the JV a deemed "Area of Mutual Interest" or "AMI".
4 Year JV initial term
The term of the JV runs until March of 2010, and continues thereafter unless terminated by either party.
Experienced JV Operator BRPC
BRPC, Chairman and President John J. "Bo" Darrah Jr., is the operator of the JV. Mr. Darrah is also a managing member and founder of AVCG, which is primarily owned by eight Kansas independent oil and gas company executives and by former ARCO Alaska President, Ken Thompson. Mr. Thompson is the managing director of AVCG and manages a team of seasoned Alaska professionals who bring many years of North Slope experience: North Slope expertise, technical knowledge, regional awareness, play concepts and history. AVCG has been active in Alaska since 1999 and incorporated BRPC in 2004.
Properties Can be Grouped Into Seven Highly Prospective Play/Lease Areas
The properties are located in the highly prospective, multi-billion barrel North Slope hydrocarbon province where several giant and super-giant oilfields have already been discovered and where substantial production activities occur. The properties can be grouped into a number of distinct play/lease areas including: Gwydyr Bay, Itkillik, Ocean Point, Slugger, Southland, Titania and Whiskey Gulch. The Gwydr play/lease area is located immediately north of the Prudhoe Bay field. Slugger is located to the east of Prudhoe Bay field. All others are located in the vicinity of the Alpine, Nanuk, Tarn and Meltwater fields. The play/lease areas have been assembled since 1999, are prospective for oil, have existing 2D leads and/or 3D drilling prospects and are located near existing infrastructure.
Four Year Initial Exploration Program Planned, Including Shooting of 3D Seismic and Drilling of Four Wells
The parties plan to conduct a series of exploration projects on the properties (and on any others that may be acquired in the future by the JV) including the drilling of four wells during the period 2006-2009 at a total estimated cost of US$46.9 million, including the costs of land, seismic, supporting prospect generation, including general and administration costs and geological and geophysical activities. TG World estimates its share of the costs of this four-year exploration program to be US$17 million, payable as follows: (a) upon execution of the JV, an initial payment of US$1.953 million for a 35% working interest share of an 80% net revenue interest in all of BRPC/AVCG's Gwydyr Bay acreages and 25% working interest share of an 80% net revenue interest in all the other BRPC/AVCG properties. The US$1.953 million is payable as to US$1.46475 million in cash and US$488,250 by issuance of 443,809 common shares in TG World Energy Corp. at a deemed value of US$1.10 per common share (shares are subject to a four month hold); and (b) a series of subsequent payments in the estimated total amount of US$15.46 million as a further contribution to the costs of the program. TG World has the right to participate or not in each part of the planned programs, but if it decides not to participate in any portion will lose its property interest in the lands subject to that part of the program only.
2006 Exploration Program Includes Additional Lease Purchase, Seismic Acquisition and Drilling of One Well
The program planned for the balance of the 2005-6 North Slope exploration season includes shooting a 3D seismic survey. The 2006-7 season activities include the shooting of a second 3D survey, purchasing more existing 3D seismic, acquiring more leases and the drilling of the first well.
Clifford M. James, President and CEO of TG World commented on TG World's entry into the North Slope Alaska JV. "BRPC/AVCG, the JV operator, has assembled an impressive strategic acreage position in one of the under explored, great petroliferous provinces of North America with many excellent opportunities to explore for and find new oil pools in the 20-200 million bbl range using the newer technologies that are now available. Discoveries when made can be quickly brought on stream. Our entry is a major growth step for TG World. It is a strategic step that brings balance to our other major asset, our Tenere Project in Niger."
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Company: Brooks Range Petroleum Corporation more info
- BRPC Preps North Slope Well for Production Flow Test (Feb 17)
- Brooks Range Spuds North Slope Prospect (Jan 26)
- TG World to Drill Up to Three Wells on Alaska's North Slope (Nov 30)