CALGARY, Aug. 14 /CNW/ - Result Energy Inc. ('Result'; TSX-V: RTE) is pleased to announce that it has entered into a second agreement with a major oil and gas entity, and has acquired a 10% working interest in 25 additional sections in the Horn River Basin, northeastern British Columbia. This increases Result's exposure to 83 gross (43.3 net) sections in this highly prospective new shale gas play.
- Result has entered into an agreement dated August 14, 2008 with Seven
Generations Energy Ltd. ("7G") (the "Agreement"). 7G is a major
private petroleum company, which was successful in acquiring 25 gross
contiguous sections of mineral rights at a recent BC land sale. Under
the terms of its agreement, Result has committed to pay $5 million to
acquire a 10% working interest in this land block.
- Preliminary plans for this project area include the drilling of at
least 2 (0.2 net to Result) vertical shale gas wells in the Q1-09
period. Horizontal well legs may also be drilled in the Devonian
shale this winter, depending on favorable drilling results, weather,
and equipment availability.
- Result will fund the land acquisition through a private placement of
common shares to 7G at a deemed price of $0.533 per share, which
represents the trailing weighted average market price of Result's
common shares for the 20 business days up to and including the date
of the land sale. Subject to regulatory approval, Result expects to
issue 9,380,863 common shares from treasury, which will increase
Result's issued and outstanding shares to 72,868,523.
- As a result of this land acquisition, 7G will own approximately 12.9%
of Result's outstanding common shares, and will thus be considered an
insider of Result under applicable securities laws. 7G is acquiring
these shares for investment purposes only, and at this time does not
have an intention to acquire additional common shares.
- The land acquired is in the Dilly Creek area, which is regarded as
one of the more prospective regions within the Horn River Basin for
shale gas potential. The joint venture lands are believed to contain
more than 125 meters of prospective Muskwa-Evie shales and are
located less than 20 kilometers from the prolific Trail a-26-G well,
which earlier this year reportedly had gas flow rates of up to
5 million cubic feet per day after fracture stimulation of the Muskwa
shale section.
- Result's estimated share of the capital costs for the Q1-09 two-well
program, in addition to seismic related activities, is $3 million.
- This transaction, in conjunction with a recently announced separate
joint venture with a major public energy Trust, gives Result exposure
to 83 gross sections (43.3 net) in the exciting Horn River Basin.
Result's land position is concentrated in the east side of the Horn
River Basin, close to the major points of access and is focused on
three separate project areas, which are within an 85 km range. This
will diversify Result's exploration, access, and infrastructure risks
on this regional play.
Investors are cautioned that this news release contains forward looking information. Such information is subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward-looking information. Readers are cautioned not to place undue reliance on forward-looking information, as no assurances can be given as to future results, levels of activity or achievements.
Result Energy Inc. is a publicly traded Canadian energy company involved in the exploration and development of oil and gas properties in western Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
Seven Generations Energy Ltd is a privately funded Calgary based company whose focus is unconventional oil and gas resource development.
The TSX Venture Exchange does not accept responsibility for the adequacy and accuracy of this release.