Platina Lines Up Funds for Appalachian Prospect
Platina Energy Group has accepted an agreement to fund up to $17,000,000 to develop the Company's Appalachian Devonian Shale prospect, a natural gas formation located in Tennessee and operated by Platina Energy Group's wholly-owned subsidiary, Appalachian Energy. The financing terms call for a revolving equity line of credit for up to $17,000,000.
Appalachian Energy was formed as part of the acquisition of 55 well sites in the Devonian Shale formation. The Company has spent significant resources for scientific data assessing the natural gas reservoir with geological and petroleum engineering reports. Pipeline access crosses the field and ample compressor capacity is available and currently in place.
A subsequent press release will provide details regarding revenues to Platina's interest. Taking into account the estimated 27.5 BCF of recoverable reserves over an estimated ten-year life (wells in the field tend to produce for significantly longer periods) this is in excess of $200 million at current natural gas forward contract pricing.
Blair Merriam, CEO, commented, "We're working with Platina Energy Group's wholly-owned subsidiary, lead by Steve Eversole, to do our best to drill and to complete all 55 wells in 2007. While resolving logistical time tables, I believe we will finish drilling and completion tasks for considerably less than our full funding commitment for which we will gain additional incentives."
Platina Energy's Corporate Counsel, Mike Tauger, should have the final agreement by the end of the week. The Company is already being advanced funds for preparation and drilling for the first wells slated for drilling later this month.
- Platina Reports Oklahoma Production for Beginning of April (Apr 24)
- Platina Acquires Enhanced Oil Recovery From UTEK Corporation (Apr 04)
- Platina Reports Oil Production of 1500 bbl/Month (Mar 25)