GPEI Signs LOI with RTR to Redevelop Tepee Butte Oil Field
Gold Point Energy Corp.
Monday, July 07, 2008
Gold Point Energy Corp. reported that its US subsidiary, GPE Energy Inc. ("GPEI"), has entered into a Letter of Intent with RTR Energy, LLC of Lone Tree, Colorado ("RTR") to farm-in for a working interest of 37.5% in the redevelopment of the Tepee Butte oil field in Hettinger County, North Dakota.
Tepee Butte is a one-well oil field located in Hettinger County, North Dakota, discovered by Amoco in 1980. The Urlacher #1-24 well produced 227,000 barrels of 40 degrees API oil, 309,000 MCF of gas, and 1,662,000 barrels of water from the C and D zones of the Ordovician Red River Formation at a depth of approximately 10,000 feet. The high water production was attributed to a poor initial cement job and the Urlacher well was abandoned in 2002. Evaluation of existing 2D seismic lines indicates 160 or more acres of structural closure at the Red River horizon, which could contain substantial undeveloped oil resources. GPE plans to conduct a five square mile 3D seismic survey to evaluate the potential for remaining undeveloped oil resources and drill a development well.
Under the terms of the Letter of Intent, GPEI has agreed to pay 50% of the cost of the 3D seismic survey, which is estimated to cost a total of $300,000. GPEI will manage the acquisition, processing and interpretation of the seismic, expected to take place during Q3-08. GPEI then has the option to earn a 37.5% working interest in the Tepee Butte field by paying 50% of the cost of drilling, completing and equipping a development well. GPEI will be the Operator of the well.
Gold Point Energy is engaged in the development of oil and gas projects in the U.S., South America and Europe. The Company has experienced technical and management professionals, which provide a high level of expertise to oil and gas project development, as well as good access to industry contacts and quality projects.