Business
Storm Cat Energy Enters Into Purchase and Sale Agreement to Acquire Arkansas Fayetteville Shale Leases
Storm Cat Energy Enters Into Purchase and Sale Agreement to Acquire Arkansas Fayetteville Shale Leases.
About this update from Sama Resources Inc.
[{"type":"text","content":"\n\n\n\n\nCALGARY, Alberta and DENVER, Feb. 7 /CNW/ -- Storm Cat\nEnergy Corporation (Amex: SCU; TSX.V: SME) today announced that it has entered\ninto a Purchase and Sale Agreement with a privately held company to purchase\n100% right, title and interest in oil and gas leases in Van Buren, Searcy and\nPope Counties, Arkansas. The acreage is undeveloped and contains\napproximately 20,000 gross and 16,000 net mineral acres. Pending the\nsatisfactory completion of due diligence review, the transaction is due to\noccur by mid-April, 2006. The effective date of the transaction is\nFebruary 1, 2006. Transaction terms were not disclosed.\nStorm Cat Energy's President, Scott Zimmerman, said: \"Today's\ntransaction, in one of the highest profile plays in North America, complements\nour business plan of acquiring leasehold in emerging unconventional gas\nresource plays. The acreage is located in the regionally extensive\nFayetteville shale play in the Arkoma Basin of northwest Arkansas. The\nFayetteville shale is an unconventional shale gas reservoir ranging in depth\nfrom 1,000 feet to 6,500 feet. Acquiring acreage in the Fayetteville Shale\nplay is consistent with Storm Cat's stated focus of pursuing, exploring and\ndeveloping unconventional gas reserves from fractured shales, coal beds and\ntight sand formations. We have seen the repeatable success that companies\nlike Southwestern Energy are enjoying and are pleased to gain entry into the\nplay. By our initial evaluation, we anticipate estimated ultimate recoveries\nof 1.0 Bcfe to 1.4 Bcfe per horizontal well with an average cost to drill and\ncomplete of $1.6 million. These are attractive finding costs, even with\nhigher service costs of drilling these horizontal wells. This position\nprovides us with over 120 net drillable locations. By developing these\nproperties in a timely fashion, we anticipate adding to the cash flow provided\nby our Powder River Basin properties while we continue to unlock the vast\nresource potential that exists in our Elk Valley play in British Columbia.\"\n\nAbout Storm Cat Energy\nStorm Cat Energy is an independent oil and gas company focused on the\npursuit, exploration and development of large unconventional gas reserves from\nfractured shales, coal beds and tight sand formations. The Company has\nproducing properties in Wyoming's Powder River Basin, ex...