Global Petroleum Cites 2Q Operational, Financial Results
Global Petroleum presented its Quarterly Report for the period ending June 30, 2010.
Texon Petroleum Ltd (ASX: TXN) advised during the quarter that the sixth Leighton well, Tyler Ranch #5, had reached its total depth of 2,743 meters (9,000 feet) and began to flow oil and gas at the gross rate of 445 boepd from the Olmos reservoir (comprising 420 bopd and 150 mcf of gas per day) through a 8/64" choke.
Tyler Ranch #5 has been connected to oil tanks and a gas sales pipeline so that Global will now begin to obtain revenue from the production.
The combined production rate of the six (6) Leighton wells (Peeler #1, Tyler Ranch #1, Tyler Ranch #2, Tyler Ranch #3, Tyler Ranch #4 and Tyler Ranch #5) is currently approximately 820 boepd (gross) with Global's Working Interest share being 123 boepd.
The seventh Leighton well, Tyler Ranch #6, is scheduled to begin drilling in late July 2010.
Global has a 15% working interest (11.25% net revenue interest) in the Leighton Project with joint venture parties Texon Petroleum Limited and Excellong, Inc.
Subsequent to the quarter end, Texon Petroleum Limited advised that it has entered into a binding agreement to sell a 20% working interest in the Leighton Field Olmos reservoir for US $6.7 million to a USA based oil and gas company. The 1,280 acres of Olmos reservoir covered in the sale agreement includes the 830.4 acres and the six (6) producing wells from the Olmos reservoir in which Global has its working interests.
Global and joint venture partner Dana Petroleum (E&P) Limited ("Dana") had commenced legal proceedings in the English High Court of Justice against Woodside Energy (Kenya) Pty Limited ("Woodside") as a result of Woodside's decision not to drill a second exploratory well in the project area, offshore Kenya.
The parties reached a mutual agreement to withdraw from legal proceedings, with a lump sum payment of US $12 million (approximately A$13.03 million) received by Dana and Global jointly, apportioned on a 50/50 basis.
Uganda EA5 Prospect
During the quarter, Global and Neptune Petroleum (Uganda) Limited, a wholly owned subsidiary of Tower Resources plc, reached agreement whereby Global will have a continuing option to participate in the Uganda Project whilst having no current obligation to contribute to ongoing expenditure.
The agreement provides Global with a right to convert its investment in the project to date into a 25% legal and beneficial interest in Uganda License EA5. Under the terms of the agreement, Global shall have the right to elect to participate until such time that Tower has obtained a firm offer of funds, from a third party or through its own fund-raising efforts, to fund any material operation in respect of the License. Global will be required to reimburse Tower for 25% of ongoing costs during the option period should it elect to participate and, in the event of third party funding, Global will dilute proportionately with Tower.
The Board continues to review opportunities for other acquisitions, joint ventures, or investments in the resources sector, both domestic and overseas, which may enhance shareholder value.
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