Nord/North-West Targets Saratov Oil Producer

Nord Oil International/North-West Oil Group is completing negotiations for the acquisition of NK SaratovNefteGeofizika in an all-cash deal. The acquisition is being made in parallel with the Magma deal that was announced last week. Nord/North-West said there is a definite interest by a number of European funds to provide the necessary funding for these acquisitions.

"Russia is a key supplier of petroleum products to Europe, and the European banking and commercial institutions are eager to participate in all oil/gas ventures involving oilfields in Russia," said Ernest Malyshev, Nord/North-West’s president.

NK SaratovNefteGeofizika is an oil, gas, and condensate-producing company located in the lower Volga basin within the Saratov area, which is a mature petroleum region of Russia.

The purchase will be for 100% of both NK SaratovNefteGeofizika and its subsidiary, ZAO Itilneft. The parent company, which was formed 7 years ago, provides an excellent opportunity to acquire low priced assets in the very prolific Lower Volga Basin; its licenses have significant further upside potential with a large surface to explore within well-defined prospects. The company has all the necessary services and facilities for growth. It presently has 142 employees and 3 certified chemical laboratories.

The assets of the target company include, among other advantages, the following areas of production:

  • The Ternovskoye Oil and Gas Field has six wells with a seventh well being set up, and it consists of the four reserves.
  • Its Klinsovskii Oil Reserve has 12,446,000 barrels of proven reserves and 17,994,000 barrels of probable reserves. In 2005, annual production was 584,000 barrels of oil.
  • The Vorobievskii Gas Reserve has three wells and the probable reserves are 505 MM cubic meters of gas with 83,000 tons of condensate. The gas reserves are to be in production in 2008.
  • The Vorobievskii Oil Reserve has three wells with 5,548,000 barrels of reserves of oil.
  • The Bobrikovskii Gas Condensate Reservoir has four wells with estimated gas reserves in the amount of 556 million cubic meters.
  • The East-Ternovskoye Gas Condensate Field has gas reserves of 107MM cubic meters and 129,210 barrels of condensate. The probable gas reserves are 207MM cubic meters and 250,390 barrels of condensate.
  • The Ostrolukskoye Oil Field has two wells with a yearly production of 85,417 barrels, with proven and probable reserves of 85,417,000 barrels of oil. There is also a direct pipeline to the Engels oil and gas base, which belongs to the company.

According to Nord/North-West, the quality of the produced oil from these deposits will obtain a premium price per barrel and will economically provide a most efficient return.

The acquisition should be completed within 2-3 months and will provide Nord Oil International/North-West Oil Group with another step toward its quest to greatly increase its presence in the European oil marketplace.

Malyshev assures his company’s shareholders that this step, along with the Magma acquisition, will dramatically increase value for the shareholders and market presence, value, and strength for the company.

Nord Oil International Inc. is a reporting, publicly traded oil and gas company trading under the ticker symbol NDOL on the U.S. Pinksheets market as well as on the Frankfurt Exchange under symbol CXIA. Nord Oil International and the North-West Oil Group merged on May 11, 2006. The company is in the process of filing all regulatory statements and will change its name to the North-West Oil Group and will be issued a new ticker symbol. The company presently produces more than 120,000 metric tons of crude oil yearly.