CALGARY, Tuesday, April 19 /CNW/ - Kroes Energy Inc. (TSX Venture: KRS)
announced today that at a recent meeting of the Directors of its 45%-owned
Kashtan Petroleum Ltd. joint venture in Ukraine, an aggressive work program
was approved for 2005 at an estimated cost of $3.2 million. The recent success
of well No. 305 in establishing "attic" oil reserves in the K1 zone has
prompted the planning of four follow up wells, of which two are expected to be
completed in 2005 and two will be drilling at year end. In addition to the
drilling program, new flow lines, measuring devices and other field
improvements will be completed.
Fred Callaway, President of Kroes, said: "the $3.2 million program is
quite ambitious, and it will be entirely funded from cash flow from the
Kashtan joint venture."
The rig from the No. 305 wellsite is now being moved some 60 metres and
will be rigged up to begin drilling well No. 301. This new well will be
deviated to a bottom hole location 400 metres to the north where both the
P1-P2 and the deeper K1 zones will be penetrated. Kashtan is studying the
possibility of then kicking off from the No. 301 wellbore and drilling a
250-metre horizontal leg into the main P1-P2 producing sands. Should this be
successful, the well would have production from the K1 zone as well as
significantly enhanced production from the P1-P2.
Following the rig move, No. 305 will be serviced by a workover rig and
placed on production at an expected initial rate of 190 barrels per day. After
stabilization of production from the K1 zone, it is expected that the P1-P2
zone will be perforated, tested and put on production.
The No. 302 well encountered four metres of lower quality pay in the
P1-P2 zone, but is presently being completed and is expected to produce about
20 barrels per day.
Kashtan Petroleum Ltd. declared a dividend to the joint venture partners
and Kroes' 45% share is $175,000. After deducting the 5% withholding tax in
Ukraine, Kroes will receive $166,000 for transfer to its Calgary account.
Kroes Energy is a junior oil and gas producer and explorer participating
in the Lelyaki Oilfield redevelopment project in Ukraine, one of Eastern
Europe's fastest growing economies. Kroes has a strong management team, with
extensive international experience. Shares trade on the TSX Venture Exchange
under the symbol KRS.
Forward-Looking Statements
THIS DISCLOSURE CONTAINS CERTAIN FORWARD-LOOKING ESTIMATES THAT INVOLVE
SUBSTANTIAL KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES, CERTAIN OF WHICH ARE
BEYOND KROES' CONTROL, INCLUDING: THE IMPACT OF GENERAL ECONOMIC CONDITIONS IN
THE AREAS IN WHICH THE COMPANY OPERATES, INDUSTRY CONDITIONS, CHANGES IN LAWS
AND REGULATIONS INCLUDING THE ADOPTION OF NEW ENVIRONMENTAL LAWS AND
REGULATIONS AND CHANGES IN HOW THEY ARE INTERPRETED AND ENFORCED, INCREASED
COMPETITION, THE LACK OF AVAILABILITY OF QUALIFIED PERSONNEL OR MANAGEMENT,
FLUCTUATIONS IN COMMODITY PRICES, FOREIGN EXCHANGE OR INTEREST RATES, STOCK
MARKET VOLATILITY AND OBTAINING REQUIRED APPROVALS OF REGULATORY AUTHORITIES.
IN ADDITION, THERE ARE RISKS AND UNCERTAINTIES ASSOCIATED WITH OIL AND GAS
OPERATIONS; THEREFORE, KROES' ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENT COULD
DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, THESE FORWARD-
LOOKING ESTIMATES AND, ACCORDINGLY, NO ASSURANCES CAN BE GIVEN THAT ANY OF THE
EVENTS ANTICIPATED BY THE FORWARD-LOOKING ESTIMATES WILL TRANSPIRE OR OCCUR,
OR IF ANY OF THEM DO SO, WHAT BENEFITS, INCLUDING THE AMOUNTS OF PROCEEDS,
THAT KROES WILL DERIVE FROM THAT.
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