Bow Valley, with a 20% interest, together with its partnership group consisting of Alaska Venture Capital Group, LLC and its operating subsidiary Brooks Range Petroleum Corporation, TG World Energy Inc., and Ramshorn Investments, Inc., (collectively the "BRPC Group") acquired the majority of acreage held by the Bachner-Forsgren-Feddersen group ("Bachner") on the North Slope of Alaska.
The areal extent of the leases acquired is 126,990 gross acres, and represents a 70% increase in the total acreage currently held by the BRPC Group. The acreage was originally acquired by Bachner in state of Alaska Areawide lease sales over the past few years. The acreage acquired is principally in four key areas on the North Slope:
--Gwydyr Bay Area: 5,115 acres east of the Milne Point Unit and surrounded on three sides by the BRPC Group's leaseholdings where the BRPC Group is conducting an exploration program this winter season. This exploration program includes two exploration wells and a 3D seismic program. --Colville Delta Area: 11,472 acres west of the Kuparuk River Unit, adjacent to the northwest corner of the BRPC Group Titania leaseholdings. --Pt. Thomson Area: 96,000 acres south of the terminated Pt. Thomson Unit, west of the Arctic National Wildlife Refuge ("ANWR"), and east of the BRPC Group Slugger leaseholdings. The Yukon Gold No.1 and Red Dog No.1 wells, both encountered oil shows, were drilled on this block of leases. --Camden Bay Area: 14,403 acres surrounding the ARCO Stinson No.1 well which was drilled in 1990, certified capable of producing, and granted extended well data confidentiality because of its proximity to un- leased acreage within the ANWR.
The BRPC Group paid an undisclosed sum of cash for the acreage, and Bachner will maintain an undisclosed overriding royalty interest in the acreage.
R.G. Moffat, President and Chief Executive Officer of Bow Valley stated, "The acquisition of these exploration leases adds considerably to Bow Valley's prospect inventory and ability to continue on a multi-well, multi-year exploration program. After this transaction closes and leases are issued from the October 2006 Areawide Sale, the BRPC Group will hold a total of approximately 307,000 gross acres. The new leases are within close proximity to the Company's current operations, satellite to some of the largest oilfields in North America, and represent one of the largest leased blocks contiguous to the Arctic National Wildlife Reserve (ANWR). We believe the leases contain excellent prospectivity and growth potential for the Company."
Updating other BRPC Group activity in Alaska, the geophysical contractor has begun to acquire data on the 130 square mile North Shore 3D seismic survey with operations scheduled to be complete by March 31, 2007. This survey will provide valuable coverage over the BRPC Group's acreage position in the Gwydyr Bay area. Drilling of the Northshore No.1 exploration well is anticipated to reach total depth over the next few weeks.
Bow Valley Energy Ltd. is an oil and natural gas exploration, development and production company with operations in western Canada, the U.K. sector of the North Sea and the North Slope of Alaska.
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