Bow Valley Acquires North Sea Acreage
Bow Valley Energy Ltd. announced the award of one new U.K. North Sea exploration block in the 24th Offshore Oil and Gas Licensing Round, and the acquisition of an additional 30% working interest in the currently owned 16/27a North block.
Bow Valley bid on and has been awarded block 22/11b as a Traditional Seaward Production License at a 100% working interest. The 22/11b block is located directly south of the Nelson field, an approximate 500 million bbl. field that was brought on stream in 1994. Bow Valley has identified two prospects on the 22/11b block and committed to the drilling of one firm well plus one contingent well. The contingent well is subject to the results of a re-evaluation of existing 3D seismic.
In addition, Bow Valley has contracted to purchase the remaining 30% working interest in block 16/27a North from an industry partner increasing the Company's working interest to 100%. The transfer of the working interest is subject to U.K. Department of Trade and Industry approval. The 16/27a North block was originally awarded in the 4th Offshore Licensing Round, thirty-six years ago, but has remained one of the few undrilled exploration blocks in the Central North Sea. The block is adjacent to the 16/27c block, which the Company also owns at a 100% working interest. Blocks 16/27a North and 16/27c are within 10 km. of producing fields at Britannia (c. 3 TCF), Alba (c. 500 million bbls) and Andrew (c. 170 million bbls). Bow Valley has mapped several prospects in multiple zones on this block. These blocks are north of the Company's Chestnut field, which is scheduled to be brought on production in late 2007.
Bow Valley has contracted a drilling rig for one well, plus one contingent well, in the fourth quarter of 2007.
R.G. Moffat, President and CEO of Bow Valley Energy Ltd. stated "The acquisition of these blocks represents a continuation of Bow Valley's full cycle exploration strategy in the North Sea. With the addition of the 22/11b block and the increase to a 100% working interest in the 16/27a North block, the Company now owns and operates four blocks at a 100% working interest on which we have identified five exploration prospects. In addition, we have identified two other prospects on blocks where Bow Valley owns a 12 - 15% non-operated working interest. In order to manage risk, maximize capital efficiency and expand the drilling portfolio, the Company may farm-out or swap a portion of its 100% working interest prospects. These prospects provide the initial inventory to support a drilling program over the next three years, which will be funded by the cash flow generated by the Company's North Sea development assets. These development assets include the Blane, Enoch, Chestnut and Ettrick fields. We expect the Enoch field to come on stream early in the second quarter of 2007, later than expected due to delays in platform modifications. Blane remains scheduled to come on-stream in the second quarter of 2007, Chestnut late in the third quarter of 2007 and Ettrick in the second quarter of 2008. These fields are expected to add initial production potential of 63,000 boe/d (gross), 7,950 boe/d (net)."
Bow Valley Energy Ltd. is an oil and natural gas exploration, development and production company with operations in western Canada and the U.K. sector of the North Sea.
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