Escopeta Oil Announces Results from Cook Inlet Basin

Escopeta Oil & Gas and BBI, Inc. of Houston, Texas, announced new seismic reprocessing results that show estimated recoverable reserves of 12 trillion cubic feet (Tcf) of natural gas near the East Forelands area of Alaska's Cook Inlet Basin, at depths of 18,000 to 21,000 ft. Known producing horizons in the same structural trend would likely recover 1.35 billion barrels of oil and an additional 6.1 Tcf of gas.

The reprocessed seismic data reveal the presence of a significant complex fault system on the east flank of the Middle Ground Shoal Field (200 million barrels reserves), forming an immense trapping mechanism, possibly the largest untested structural fault block in the Cook Inlet Basin. Geophysical and geological mapping reflect approximately 9000 feet of vertical closure against this fault system representing approximately 69,000 acres of structural closure. The depth of the main targets suggests accumulations of thermogenic gas.

The estimated recoverable reserves are considerably more than the current remaining reserves of 2.56 Tcf in the Cook Inlet Basin and may total more than the cumulative recovery throughout the entire history of natural gas production in Alaska (about 10 Tcf). By comparison, the Prudhoe Bay fields hold an estimated 36 Tcf of natural gas, but their exploitation depends on the construction of a multi-billion dollar natural gas pipeline from the Arctic.

The major portion of the newly identified prospect lies below shallow waters of the Cook Inlet, however the initial wells can be drilled from onshore locations. The first exploratory well is slated for year-end 2002.

Current natural gas production in the Cook Inlet Basin is 0.5 to 0.6 Bcf per day, with one third going to LNG exports, one quarter to local ammonia/urea production, and the balance to regional gas utilities and electric power generation. Success at the Escopeta-BBI prospective area opens the possibility for expanded Alaska LNG exports for local industry, as well as long term indigenous natural gas supply for Anchorage, the state's largest city.

Escopeta Oil and Gas has been conducting business in Alaska since 1993 and is currently the third largest leaseholder in the Cook Inlet Basin with over 120,000 acres under lease. Several promising prospects have been identified under Escopeta-BBI lease blocks.