Delek & Les Iles Petroles Ink Exploration Deal
|Tuesday, March 23, 2004
Havana Republic's subsidiary, Delek Corp., has signed a letter of intent for a joint venture agreement with Les Iles Petroles Internationaux, LLC, an affiliated company, to explore in the Williston Basin of North Dakota where the Company has already secured a few leases, and in the Hardeman Basin in western Texas.
The joint venture will be exploring mainly for geologic formations called Lodgepole reefs. The Company plans to start drilling at some of these locations in the next 30 days. The joint venture provides Delek with a 20% interest in up to 100 future drilling sites. Final details of the agreement are subject to change. The letter of intent executed by the two parties is considered proprietary to Les Iles and will not be published herein. The definitive agreement will be published upon execution in addition to all other required disclosures pursuant to federal securities rules and regulations. Management believes that a final agreement will lead to a larger pool of locations to drill and therefore increases the chance of success of a drilling program. The Company already has interests in these areas.
This is an exploration play for the Mississippian aged Lodgepole carbonate build-ups in the Williston Basin of Montana and North Dakota and the Hardeman Basin of western Texas. A new exploration technique (see below) is being applied to this play, and should it prove successful, it will be a material event for the company. The Lodgepole limestone was deposited in a very shallow ancestral Williston Basin. The carbonate formation was developed as thousands of small, circular limestone build-ups, or "reefs". The average distribution of the build-ups is about 4 reefs per square-mile section. The Lodgepole reefs were deposited within a "fairway" a thousand miles long and thirty miles wide on the shelf of the Williston Basin. The reservoirs may produce as much as 2,000 barrels per day at depths of 500 to 9,500 feet. The most prolific reefs have each produced as much as 4,000,000 barrels of light, sweet oil.
The Lodgepole reefs are visible in surface outcrop in the far western part of the Williston Basin. This allows the sense of scale and geometry of the reefs can be observed first hand. The lithologic complexity of the reservoirs can also be examined. Delek Corp.'s technology partner in this play is a company named Oil For America (OFA). OFA has applied a proprietary photo-analytical program known as All Remote Sensing analysis. This analysis detects the location of Waulsortian reef cores. This program produces well-defined images that correlate with the oil producing wells.