Under the terms of the JV, Ramshorn has acquired a 25% working interest in almost all of AVCG/BRPC's existing oil and gas leases (the "properties"), 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 173,820 net acres.
Ramshorn paid an undisclosed sum of cash up front in the transaction and will disproportionately pay for exploration drilling with AVCG receiving a carried interest during the exploration and delineation phase of prospects it currently has or will generate in the future. Ramshorn will pay its proportionate share of future land acquisitions and seismic.
The parties have also entered into an exploration joint venture alliance regarding a more extensive exploration and development program on a large designated area containing all other State of Alaska oil and gas leases on 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 Mutual Interest (AMI)" with new venture opportunity for the JV.
Brooks Range Petroleum Corporation, AVCG's operating entity, is the named Operator of the JOA. BRPC Chairman and President John J. "Bo" Darrah Jr., stated, "We are excited to be working with Ramshorn who will bring not only capital but also expertise and exploration insight to our North Slope prospects."
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/CEO and ARCO Executive Vice-President, Ken Thompson. Mr. Thompson serves as the Managing Director of AVCG. "The Ramshorn JV is similar in scope to the JV we announced in May with TG World Energy of Calgary. Having two quality partners such as Ramshorn and TG World Energy allows AVCG/BRPC to move forward with our multi-year, multi-well exploration plans."
AVCG has been active in Alaska since 1999, and operations and exploration services subsidiary BRPC was formed in 2004. AVCG's 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. AVCG's 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 Gwydyr Bay play/lease area is located immediately northwest 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 on the western side of the North Slope. 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.
The program planned for the balance of the 2006-07 North Slope exploration season includes purchase of 3D seismic and shooting of new 3D seismic. In addition, more leases will be acquired and tentative plans are to drill two exploration tests this coming winter.
Jordan R. "Digger" Smith, President of Ramshorn Investments, Inc. commented on Ramshorn's entry into the North Slope Alaska JV. "Ramshorn believes there is significant oil and gas yet to be discovered on the North Slope. Our JV with AVCG/BRPC gives us a foothold in this prolific basin, and we look forward to teaming up with AVCG/BRPC's experienced technical personnel and management team."
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