Ilyas Chaudhary, Chairman and CEO of Pyramid noted substantial progress is being made in growing the value of the company: "Our new drilling prospects in Alberta have the potential to significantly increase out production and reserves, and the acquisition of an additional working interest in our existing Alberta and Montana assets will improve our operating results going forward. We are currently in negotiations for farm-in opportunities in Indonesia and the opening of our representative office in Jakarta reflects our confidence in the ultimate success of these negotiations. As well, we have contracted Iradesso Communications to improve our efforts to keep the market informed of our progress."
New drilling prospects in Alberta
Pyramid has acquired 160 acres of crown land in the Thompson Lake area of eastern Alberta, where the company is targeting light oil formation in the Dina sandstone. A seismic has identified a potential oil-bearing formation at a depth of less than 1,000 meters.
As well, Pyramid has entered into a seismic option and farm-in agreement on four parcels of land totaling 2,040 acres in the Provost area of southeastern Alberta. Pursuant to the agreement, Pyramid intends to fund the drilling of two wells, earning 100 percent for each parcel, subject to an overriding royalty. Trade seismic on these lands has been acquired and reprocessed and is currently being evaluated. Pyramid anticipates mapping two drillable prospects on these lands. The primary objective is Dina light oil at a depth of less than 1,000 meters, which is a productive zone throughout the area.
Rig availability and services has recently improved significantly in Alberta, and Pyramid plans to drill these prospects in the first quarter of 2007.
Acquisition of additional working interest in Alberta and Montana
Pyramid has purchased, subject to stock exchange approval, an additional 0.75 percent working interest in the Alberta and Montana assets in which the Company previously announced a 5.09 percent working interest on May 4, 2006.
The purchase consists of Pyramid's CEO's remaining interest in 49 producing oil wells and 963 producing gas wells; 200 wells that are currently not producing, some of which could be put on production with minimal expenditure; 560,000 acres of developed land and 850,000 acres of undeveloped land; 450 miles of pipeline system; and one gas processing plant. Pyramid has issued a promissory note in the amount of US$600,000 as payment in full for the purchase of the 0.75 percent interest in the assets. The promissory note is due on March 31, 2008 and carries an annual interest rate of 8 percent. The purchase will add proved reserves of 144,000 barrels of oil equivalent (boe) to Pyramid.
Representative office in Indonesia
Pyramid has opened a representative office in Jakarta, Indonesia to expedite current negotiations of farm-in arrangements and to assist in identifying new opportunities in the region.
Investor relations agreement
Pyramid has signed an agreement, effective November 1, 2006, with Iradesso Communications Corp., a Calgary-based investor relations firm, to assist the Company to communicate its plans and results to the investment community. The TSX Venture Exchange requires that details of the arrangement between Pyramid and Iradesso be disclosed. Iradesso will provide investor relations consulting and design services at a rate of $6,000 per month. The agreement is binding until January 31, 2007, after which either party can amend or terminate the agreement on 30 days' notice. Iradesso's role includes development of Pyramid's communications materials, including website, corporate profile and corporate presentation, as well as development of Pyramid's annual and quarterly reports and other marketing materials to ensure Pyramid communicates effectively with investors. Iradesso will also answer investor questions, set up investor meetings and proactively share the Pyramid story with investors. Ken Wetherell will be Iradesso's main investor relations contact for Pyramid. Iradesso and its employees do not currently have any interest, directly or indirectly, in Pyramid.
Pyramid Petroleum is an oil and gas exploration and production company based in Calgary, Alberta. The company's focus is on development of domestic and international hydrocarbon projects. Pyramid has non-operated working interests in producing properties located in Alberta, Montana and the Gulf of Mexico. The combined production net to Pyramid from these properties is currently approximately 325 barrels of oil equivalent per day (boepd).
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