Octagon 88 Resources Announces Preliminary Results From the Elkton Erosional Edge Cores Now Under Analysis In Labs
CALGARY, Alberta--(BUSINESS WIRE)-- Octagon 88 ResourcesInc. (OCTX) is pleased to provide the following first analysis of the cores successfully taken from Elkton Erosional edge well. The porosity throughout the full 20 meters of pay zone has shown to be 30 percent rather than the earlier announced 18 percent. This dynamically increases the amount oil contained in the sands. Additionally the cores are fluoresced orange throughout the complete pay zone indicating again to be lighter heavy oil to produce with primary production methods.
These cores are being tested in AGAT laboratories to confirm the properties of this dolomitic highly oil saturated limestone deposited in a carbonate environment. From the extensive well control information (including positive reviewed cores studied in the area) the geological study was able to establish the sweet spot. The well site finding has established 20meters of oilsands pay zone with the well logs now indicating porosity values up to 30%, whereas the industry minimum porosity required for production is 8%. The consistency of the sands through the pay zone were 100 percent complete with no water present which when confirmed at AGAT labs, the company would have a second primary production project in parallel to the prior announced successful Blue Sky Gething project. The first 2 projects combined will target scaled development possibilities of 50,000 barrels a day of conventional heavy oil production beginning this year.
The project has the opportunity for primary production without stimulation or EOR (enhanced oil recovery), as the oil in the erosional edge is expected to be of a lighter API (density) than the main thicker Elkton & Debolt zones.
The first well in the Elkton project targeted the sweet spot that was established through geological studies. Based on other similar industry experience in the Grosmont area the company is projecting through several stages to ultimately bring on multiple 5,000 to 10,000 barrel a day scalable projects. Production from the Erosional Edge projects recently came to the forefront with the success of Laricina and Osum announcing commercial operations; a joint venture on the erosional edge of the Grosmount Carbonates using new technologies. Also Shell, Husky, Laracina, Osum, Athabasca Oil and Sunshine Oil are all currently advancing their Carbonate projects.
The next 2 to 3 weeks the company will establish the various types of oil now identified, through AGAT laboratory analysis. This includes the API indicating mobility and Viscosity giving a more precise conclusion to the amount of oil held in these oil sands. Thereafter the company is commissioning simulation work on the cores in a second 3 week period, providing recovery rates based on the optimal methods of extraction.
In the interim, based on the results already known, the company has commissioned a 3D seismic program to determine where the company will license the first 4 to 6 wells, targeting production prior to year end.
The third future development project will target the known erosional edge in the Debolt area. After these 3 projects have commercial production firmly in place, future growth will come via unlocking the large potential of Carbonate's included in the company's leases.
In 2012 / 2013 Octagon 88 Resources, Inc. acquired substantial light and conventional heavy oil assets in Northern Alberta. The acquired projects have been substantially de-risked which leads the company to emerge as a development stage oil and gas company as of January 22, 2013. The company's intention is to grow shareholder value through mergers and acquisitions opportunities available to the company. Octagon 88 Resources is the largest publicly trading shareholder of CEC North Star Ltd. with a 33% ownership.
The current program schedule entails working with the operator of these properties to bring on production and cash flow through the company's direct working interests, and indirect investments spread throughout the projects.
CEC North Star Energy Ltd is a non-public Calgary based Energy Corporation with a substantial oilsands lease holding in the Peace River block of north western Alberta Canada.
CEC North Star has acquired sixty-seven (67) sections respectively 39,040 acres of leaseholds with a prospective resource of 873 MM bbl (Best Estimate) PIIP in the Elkton Debolt formations based on a 25 section independent analysis. The same independent petroleum engineering firm conducted a feasibility study 139 Mil (NPV @ 10% fully risked) based on a typical four sections development of the Elkton/Debolt. In addition we have already established the property is prospective for Bluesky/Gething oil sands formations which are indicating early primary production development similar to other projects in the Peace River Block offering significant production potential.
CEC North Star has entered into a joint venture agreement on adjoining properties consisting of 23 sections or 14,720 acres which may increase PIIP (Petroleum Initially in Place) to in excess of three (3) billion barrels.
CEC North Star goals of ultimately 200,000 bbl/d of bitumen from these lands and objectives are to create value by developing these oilsands properties using scalable project development targeting multiple 5-10,000 bbl/d facilities with stakeholder involvement at every stage - Environment, Occupational Health and Safety are of paramount concern. Use of known technologies while remaining flexible to adopt new processes to maximize recovery of oil in place while reducing operating costs and a relatively quick schedule and lower capital costs compared to other oilsand projects resulting in maximum return on capital invested and quicker shareholder returns.
This press release contains forward-looking statements concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Forward looking statements in this press release include statements about our drilling development program. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the timing and results of our 2012 drilling and development plan. Additional factors include increased expenses or unanticipated difficulties in drilling wells, actual production being less than our development tests, changes in the Company's business; competitive factors in the market(s) in which the Company operates; risks associated with oil and gas operations in the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended December 31, 2012. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as "probable," "possible," "recoverable" or "potential" reserves among others, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our filings with the SEC.
Octagon 88 Resources, Inc.
(+41) 79 237 6218
CEC North Star Ltd.
+1 (587) 353 5550
Alexander Baldi, (+41)79- 256-9534
KEYWORDS: North America Canada
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