The company has secured a formal extension to the terms of its Letter of Intent (LOI) with Maxim Well Services Ltda. giving the company through December 15, 2006, if needed, to complete its ongoing due diligence of the assets in advance of executing the definitive Joint Operating Agreement (JOA).
The LOI with Maxim outlines the company's intent to acquire a 20% working interest in and rights to explore and produce hydrocarbons in the Middle Magdalena Valley's Bosques Block. Radial Energy is working to reactivate and maximize the play's known production and explore its potential for substantial untapped reserves. Chief Operating Officer Omar Hayes is currently in Colombia registering Radial Energy as an active oil & gas company and establishing its new field office.
Radial Energy is proceeding with negotiations of the Bosques Block JOA based on the positive findings of a third party reserve assessment conducted by Gustavson Associates, which estimates that 1,100,000 gross barrels of proven oil reserves remain to be produced from a field on the block which is currently defined by two recently shut-in wells. Of these proven reserves, 550,000 barrels are classified as proved non-producing and 550,000 barrels are classified as proved undeveloped. The report also estimates proved plus probable reserves of 2,300,000 barrels and proved, probable plus possible reserves of 4,100,000 barrels.
"We are extremely excited about the progress made to date in Colombia," said company President G. Leigh Lyons. "At Radial Energy we are committed to moving quickly to take full advantage of opportunities to build asset value and cash flow. We have been busy in Colombia during the Bosques Block due diligence period, with the opening of the new office in Bogota, the company registration effort and ongoing pursuit of new projects in the region. We look forward to executing the JOA and initiating development work on the block soon thereafter."
Radial Energy identifies, acquires and develops low-risk oil and natural gas exploration and development opportunities throughout the Americas. The company's strategy involves targeting overlooked or under-developed reserves that are under the radar of multinational oil companies and out of the reach of small independents.
Radial Energy has rapidly assembled an impressive portfolio of oil and gas plays including working interests in two separate oil and gas prospects located in Cherokee County, Texas, as well as in the Block 100 oil project located within the Huaya Anticline area in the Ucayali Basin of eastern Peru. The company has also executed a Letter of Intent to acquire rights to explore and develop oil reserves on the Bosques Block play located in the prolific Middle Magdalena Valley of Colombia. The company targets prospective oil and natural gas opportunities in historically productive regions with a primary focus on identifying previously drilled but undeveloped exploratory wells that, due to factors at the time of initial drilling including the absence of pipeline infrastructure, lack of modern recovery technology, poor geological or engineering interpretation or low oil and gas prices, were not fully exploited.
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