Aurado Exploration Acquires Stake in Kazakhstan Acreage
Aurado Exploration Ltd. has acquired a 90% interest in the Liman Contract Area in western Kazakhstan through a wholly-owned subsidiary of Vela Financial Holdings Ltd. Vela owns approximately 17% of the outstanding shares of Aurado. Under the terms of agreements entered into between Aurado and Vela, Aurado assigned its rights and obligations to the Liman project to Vela, and in return Vela paid a total of US$4,900,000 to the sellers of the Liman interest.
Aurado will operate and manage the Liman project on behalf of Vela.
Aurado and Vela have entered into a Put and Call Option Agreement whereby upon the Company receiving the approval of the Toronto Stock Exchange for the completion of the acquisition of the Liman interest, Aurado will purchase the Liman interest from Vela in exchange for the following:
- The payment of either (a) US$4,900,000 in cash, or (b) the creation and delivery of a US$7,700,000 5-yr. discounted convertible redeemable note bearing interest at 6% per annum, convertible into common shares of Aurado at a conversion price of $0.20 per common share. The creation and delivery of the Note was approved by the shareholders of the Company on November 18, 2002. If payment is made to Vela through the Note rather than cash, Vela will be required to transfer US$1,600,000 to Aurado in addition to the Liman interest; and
- The issuance of the 200,000,000 common shares of Aurado, as per the agreement between Aurado and OCL assigned to Vela described above.
The Company recently reported the completion of drilling of the East Tegen-1 well on the Liman Contract Area in western Kazakhstan. The well reached TD (total depth) of 563 meters within the Kungarian salt, as forecast. Well logs have been run and Aurado is preparing to undertake production testing of the well. Results of the testing will be released as soon as possible. Potential recoverable reserves in the Albian Sand reservoir at East Tegen are independently estimated by Canadian Petroleum Engineering Inc. of Calgary, Canada, at 32.6 million barrels.
The resource potential for the entire Liman block has been independently estimated by Sproule International Limited of Calgary, Canada, to be 708 million barrels of recoverable reserves. The Company's geological staff is finalizing the coordinates of the next well to be drilled within the Liman block.