Pyramid Increases Stake in Gulf of Mexico Wells
Pyramid Petroleum Inc. has executed an agreement to increase its interest from 20% to 50% in a limited liability company (the "LLC") owning varying working interests in 12 producing and 40 non-producing oil and gas wells in the Gulf of Mexico.
The increased interest in the LLC provides current net production to Pyramid's interest of approximately 510 barrels of oil equivalent per day (boe/d), in addition to the 340 boe/d provided by Pyramid's original interest in the LLC, increasing the Company's current production to approximately 1,150 boe/d. The purchase of the original interest in the LLC was announced on April 3, 2007. The closing of the transaction is subject to regulatory and stock exchange approvals.
Mansoor Anjum, President of Pyramid, commented, "Increasing our interest in these oil and gas wells gives us a solid production base in excess of 1,000 boe/d, an important threshold for a junior exploration and production company, and builds on our previously announced strategy of increasing our Gulf of Mexico reserves and cash flow."
The contracted purchase price for the additional 30% of the LLC is US$10.5 million with an effective date of May 17, 2007. The purchase price, which includes a plugging and abandonment bond and closing costs, has been funded with a combination of debt and deferred payments.
Production from the additional 30% of the LLC consists of 285 barrels per day (bbls/d) of oil and 1,350 thousand cubic feet per day (Mcf/d) of gas, for a total of 510 boe/d. Pyramid has substantial potential to increase production and reserves of the acquisition by completing the behind pipe non-producing horizons.
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 640 barrels of oil equivalent per day ("boe/d").
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