(1) Land/Lease Acquisition -- more than 200 gross square miles (137,000 acres) holding an estimated 4.2 billion barrels of gross certified oil in place have already been identified and in the process of being acquired for a net equity and working interest of 942 Million Barrels of OBIP (after the Peace Oil transaction is consummated and including Signet we anticipate 377 million barrels of net recoverable). Over the next 3 years Surge plans to acquire up to 400 square miles at land sales to increase oil in place to 10 billion gross barrels or 1 billion net barrels.
(2) Resource(a) Validation -- Three horizontal wells and six stratigraphic ("strat") wells have already been drilled. Additional strat wells will be drilled on all properties to confirm reservoir thickness and quality and the character of the oil. Additional seismic will be acquired to confirm the areal extent of each oil accumulation.
(3) Converting the certified Resources into Probable Reserves(b). A number of strat wells will be cased and tested on each property. A limited number of horizontal wells will be drilled to conduct pilot tests to determine well productivity.
(4) Converting sufficient of the Probable Reserves into Proven Reserves to comprehensively prove commercial viability. A comprehensive reservoir/production model will be created from the data acquired to this point and will be tested against various existing heavy oil technology alternatives and successful current production projects to determine the optimum development plan for the projects.
As a validation to its Land/Lease and Resource Validation strategy through its wholly-owned Canadian subsidiary Cold Flow Energy, ULC (``Cold Flow''), Surge deposited into escrow an additional deposit of $450,000 Cdn. on January 16, 2007 thus extending the acquisition closing date until March 2007. Effective at the closing of the Acquisition, Peace Oil will become a wholly owned subsidiary of Cold Flow. On November 30, 2006, the Company entered into a Stock Purchase Agreement with Cold Flow, Peace Oil, and shareholders of Peace Oil. Pursuant to the terms of the Stock Purchase Agreement, the parties agreed that Cold Flow will purchase all of the issued and outstanding shares of the capital stock of Peace Oil for a total purchase price of $16,350,000 Cdn., which consists of $6,350,000 Cdn. in cash and an aggregate of 8,965,390 exchangeable shares of preferred stock of Cold Flow. The Balance due to Peace Oil upon closing will be $5,750,000 Cdn.
Surge CEO David Perez said, "I am pleased to announce that during the past three months the Surge Board of Directors have worked diligently to assist me in developing our new four-step business strategy."
In addition, the company has retained Granite Financial Group as its financial advisor on a non-exclusive basis to secure up to $10 million dollars in equity and debt financing. The use of proceeds will be for the acquisition of Peace Oil Corp. and for its related share of drilling delineation wells in the Peace River and Athabasca oil sands.
Surge Global Energy, Inc., located in San Diego, California is on a quest to aggregate and exploit one billion (net) barrels of OBIP of oil sands properties in the Peace River and Athabasca regions of Alberta Canada.
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