Liberty Energy concluded the assignment of royalty rights (ORRI) to a proven multi billion cubic feet of natural gas property in North-West Bulgaria, 130km from the capital city Sofia. Based on the A-Lovech exploration block which covers 1,830 square miles (or 1,171,200 acres) of the East European country, the property contains the Deventci-R1 well, the deepest drilled in Bulgaria for 30 years.
Part of the West Koynare structure of the Lower Triassic Alexandrovo formation, the well has also recorded the highest bottom-hole pressure encountered in the country, measuring 11,500psi, as well as recording low sulfur content. The royalty also entitles Liberty Energy to royalty interests on all future revenues and reserves located on the expansive exploration block, with no further cost to the company.
According to the Bulgarian Economic Minister, this project alone "has potential to meet up to one half of Bulgaria's gas needs for the next two to three years." It is anticipated that the development will be tied in with the nearby Aglen field infrastructure, and first sales are expected in 2011, upon completion of the pipeline. Following this transaction, Liberty Energy plans to continue searching assets in Bulgaria and surrounding European regions with a view to engaging in similar low risk opportunities.
Ian Spowart, President of Liberty Energy said, "We are delighted with this move to acquire interests in this scale of project in Bulgaria, as it underlines Liberty's commitment to exploring some of the world's richest and most under-exploited resources. We believe our Bulgarian royalties over this proven multi billion cubic feet asset represent near term revenue streams for the company. In conjunction with out Texan property, we hope to ramp up production and cash flow in a rapid sustained manner."
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