West Canyon Energy has come to an agreement to sell its interests in the Buena Vista Block located in the Bolivar Field in Colombia for the amount of $4 million.
Shane Reeves, President and Chairman of West Canyon Energy, states: "With the proceeds from the sale of our Buena Vista Block, we will be focusing on producing and near producing developmental projects within the Rocky Mountain region and elsewhere in the U.S. and Canada. The sale puts a substantial amount of cash into the Company and gives us the ability pursue projects that we otherwise would not have had the opportunity to review. We currently have several producing projects undergoing technical and economic evaluation."
Spring Creek Prospect – Slope County, North Dakota
West Canyon Energy has recently engaged a firm to provide seismic interpretation as well as a geological and geophysical review of its Slope County oil and gas project in North Dakota. Also known as the Spring Creek Prospect, the project's main target is of the Red River formation. West Canyon currently holds a 100% Working Interest (WI) and 80% Net Revenue Interest (NRI) before payout, with the Company retaining 80% WI after payout.
Situated within the Williston Basin and inside the southern border of the prolific Bakken formation, the Spring Creek Prospect contains 4,800 acres and five (5) different target formations with substantial potential reserves Spring Creek is located in an area with a proven track record of Red River formation oil and gas production. The prospect is bracketed to the northeast by successful wells drilled by Hunt Oil and to the southwest by the production of the Cedar Creek Anticline.
Buena Vista Block – Bolivar Field, Colombia
West Canyon Energy reached a farmout agreement with a Colombian company (“buyer”) for the sale of a 16% participation stake in the 25,000 acre Buena Vista Exploration and Production Contract held by our wholly-owned subsidiary Petrosouth Energy Corp. for $4 million. Effective September 16, 2008, West Canyon received a payment of $200,000 with the buyer's payment of the remaining balance scheduled to come within 30 days from a Liquidity Event, or by December 31, 2008. In the event that full payment is not made before the deadline, the property is reverted back to West Canyon.
In addition, the Buyer is responsible for all costs associated with the project going forward as of the effective date. Until the purchase price has been fully paid, West Canyon will continue to receive our proportionate share of the revenue from the property.
Mr. Reeves stated: "We are quite satisfied with the terms of our farmout agreement. The sale provides us with the opportunity to continue our efforts in building a stronger domestic oil and gas company.”
Talora Block Project - Colombia
West Canyon Energy holds a 20% participation stake through its wholly-owned subsidiary PetroSouth Energy Corp. in the Talora Block that lies southwest of Bogota, Colombia. The 108,333 acre contiguous parcel of land contains 5 prospects with combined potential reserves of 209 million barrels of oil (MMBO). Brazil's state owned Petrobras has operated the Guando field just southeast of the Talora block since November of 2002 which has recoverable reserves of approximately 117 million barrels and is currently yielding 33,000 barrels of oil per day (BOPD).
Carbonera Block Project – Catatumbo Basin, Colombia
Through its wholly-owned subsidiary, PetroSouth Energy Corp., West Canyon holds a 6% WI in the Carbonera Exploration and Exploitation Contract as well as participation in three future exploration wells. The Carbonera Block is located in the Catatumbo Basin, which has produced billions of barrels of oil to date with an estimated total of 20 billion barrels that have yet to be produced. Covering roughly 64,000 acres, the block represents potential recoverable reserves of 60 billion cubic feet of natural gas (BCFG) and 17.6 million barrels of condensate.
An initial exploration well has already been drilled within West Canyon's block. The Cerro Gordo-1 Well tested a combination of 4 million cubic feet of natural gas per day (MCF/D) and 60 barrels of condensate per day (BOE/D).
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