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Galaxy Energy Corporation Provides Update for Piceance Basin Project - Drilling program to commence by mid-November; interest acquired in currently producing well
Galaxy Energy Corporation Provides Update for Piceance Basin Project - Drilling program to commence by mid-November; interest acquired in currently producing well.
About this update from Xxl Energy Corp.
[{"type":"text","content":"\n\n\n\n\nDENVER, Colorado, Oct. 6 /CNW Telbec/ - Galaxy Energy Corporation, (OTC\nBulletin Board: GAXI) today provided an operations update for its Piceance\nBasin natural gas development project. The Piceance Basin project is the\nlatest addition to the Company's portfolio of unconventional gas projects in\nthe Rocky Mountains, Romania and Germany.\n\nAcreage added and working interest adjusted\n-------------------------------------------\n\nGalaxy, though its wholly owned subsidiary Dolphin Energy, and Exxel\nEnergy Corp. (TSX: EXX), its partner in the project, have accumulated over\n5,000 undeveloped acres since March 2005 at a cost of $14.5 million, which was\nshared about equally.\nThe two companies have recently agreed to adjust their interests in the\nproject to reflect their original intent giving Galaxy a 25% working interest\nand Exxel the remaining 75% working interest. As a result of the amendment,\nfunds contributed by the parties can now be employed for both acreage\nacquisition and operations. In addition, Dolphin's initial contribution is\ncapped at the US$7,000,000 already contributed to the project by Dolphin, and\nExxel is committed to an initial contribution of US$21,000,000. Exxel has to\ndate contributed US$12,000,000 to the project and the project escrow account,\nand is required to contribute the balance of US$9,000,000 as costs are\nincurred. To bring capital contributions in line with this working interest\narrangement, Exxel and the project escrow account will fund 100% of the next\n$14.0 million of expenditures for land, drilling, completion and connection\ncosts. Operatorship has been revised under the amended agreement, with Exxel\nbeing designated operator, but with Dolphin undertaking operations as contract\nsub-operator.\n\nDrilling to begin in November\n-----------------------------\n\nSurveying, permitting, and access & drilling location preparations are\nunderway for the drilling of Galaxy's first operated well in the Piceance\nBasin, which will be located in Garfield County, Colorado. Drilling of the\nfirst well is expected to commence by the middle of November 2005 and it will\nbe followed with a continuous drilling program at additional locations on the\nleasehold.\n\nProducing well acquired\n-----------------------\n\nIn conjunction with its ongoing leasing program, Galaxy has complet...