Fox Petroleum achieved a number of important developments within the last quarter including acquisitions in Alaska and the North Sea, further detailed analysis of existing prospects, and the completion of the Spears Gas Unit 2, Well #1, which will provide a steady revenue stream estimated over $1 million per year.
"The addition of these new prospects represents enormous potential for us," said Alex Craven, Vice President, Finance & Director. "The continued development of our existing oil and gas assets and the important milestone achievement of accruing production revenues have helped Fox Petroleum move away from being purely an exploration company. The continued exploration and production activities will help increase the underlying value of our company and pave way to future progressions."
The Spears Gas Unit 2, Well #1 has been successfully put into commercial production and is currently producing at rate of approximately 2.5 million cubic feet of gas per day. Fox Petroleum currently owns 22.5% of the working interest of this well and expects to generate revenues in excess of $1,000,000.00 per year which is expected to cover initial costs of drilling and completing the well within 6 months of commencing production.
Currently, Stratco, the operating company on the Spears Gas Unit 2, Well #1, is undertaking acid fracturing operations to optimize, and possibly increase, the current production rate. Fox Petroleum is currently reviewing several further low-risk, short-term production opportunities in the region, with an aim of doing several more this year to boost production and positive revenues.
Alex Craven commented on the company milestone by stating, "The success of the spears Gas Unit 2, Well #1 is a prime example of our management teamís extensive experience and expertise. The achievement of commercial production represents an important step in the growth and development of our company, and we are very pleased with the results of this first well, and look forward to continued participation in the region."
Fox Petroleum has continued to add to its Alaskan holdings by acquiring approximately 42,000 acres of onshore oil and gas leases in the Cook Inlet region of Alaska comprising the Catcher's Mitt Prospect. The Catcher's Mitt prospect will be the focus of Fox Petroleum's Alaskan operations for the first quarter of 2008.
Fox is currently undertaking a four-stage development program, being conducted by Hodgden & Associates in the USA and the Fox Technical Committee in London, which will allow the company to obtain critical advancements needed in order to begin drilling. New data has been acquired by Fox including Seismic, Magnetic and Gravity survey data. The development program is expected to be completed by February 2008, and will culminate in a final report which will fully reflect the project's potential, and will include prospective resource estimates as well as defined prospective drilling locations.
Fox Petroleum is currently completing the seismic data interpretation, and analysis of the Anglesey Prospect located in the Central North Sea License P.1211 Blocks 14/9a and 14/14b. The data which is being analyzed comes from the Fox Petroleum commissioned offshore seismic survey completed by Fugro, one of the world leaders in seismic surveys and data acquisition. With the analysis and interpretation of the data almost complete, and confirmed rig slots for 2008, Fox looks forward to commence drilling activity in the 2008 season.
Fox currently holds a 33.33% working interest in the Anglesey prospect which, based on a geological report by TRACS International Ltd., could potentially represent a stake of 213 MMBO of prospective resources.
In the previous quarter, Fox Petroleum was successful in acquiring a 46% working interest in the Bourbon Prospect in the Central North Sea area. The Bourbon prospect is estimated to have prospective resources (mid case) of 167 million barrels of recoverable oil (mmbo) with prospective secondary resource estimates of 278 MMBO and 45 MMBO in the Upper Jurassic Sandstones.
Fox Petroleum's working interest in the Bourbon Prospect represents potential reserves in excess of 225 MMBO which raises Fox's total prospective resources in the North Sea to 438 MMBO, at today's oil prices (approx. $90/ Barrel) this represents a potential value of over $ 39 Billion.
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