GALE FORCE PETROLEUM, WHL ENERGY AND DERBY RESOURCES ANNOUNCE FARMOUT OF KENTUCKY SHALE GAS PROPERTY
- Project to Focus on Near-term Increases in Production and Revenues -
Montreal, January 14th, 2008 - Gale Force Petroleum (TSX-V: GFP), WHL Energy (ASX: WHL) and Derby Resources (collectively, the “Farmors”) are pleased to announce the signing of a farmout agreement. According to the terms of the agreement, the Farmee, who will remain confidential, may earn up to 50 percent interest in the Kentucky Shale Gas Property, currently comprised of 22,000 acres, 9 existing wells, gathering lines and two compressors in Eastern Kentucky, by paying for a series of staged development programs.
The primary goal of the farmout is to increase and accelerate natural gas production and revenues generated from the current Kentucky Property and adjoining leasing opportunities. The initial development program, estimated to cost $400,000, will begin in the spring of 2009 and will focus on the completion of some of the existing nine wells. For paying the completion of the existing nine wells, the Farmee will earn a 60% interest before payout in these wells.
Additional development programs will be pursued at the Farmee’s option later in 2009 and in 2010. For newly drilled wells, the Farmee will earn a 75% interest before 1.5 times payout. The Farmee, at its option, may spend up to $2 million on the programs, upon which it will back in to earn a 50% interest in the Kentucky Property.
There is consistent natural gas potential across the Kentucky Property and low-cost, low-risk drilling for the Devonian Shale target, with more than 200 prospective drilling locations immediately adjacent to the existing infrastructure. The Devonian Shale is consistently 250 feet in thickness on the Kentucky Property, with a predictable natural gas production profile.
The Kentucky Property forms part of the oldest producing petroleum system in the United States. The Devonian Shale plus Middle and Upper Paelozoic system in the Appalachian Basin together contain 31.4 Tcf of technically recoverable natural gas, with estimates of an aggregate 550 Tcf natural gas in place, according to the US Geological Survey. Within the system, there are 15,000 wells drilled to or through the Devonian Shale in Eastern Kentucky alone.
ABOUT GALE FORCE PETROLEUM INC. - www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and exploiting unconventional and conventional gas resources in mature basins, building shareholder value through growth. It owns producing natural gas properties in Alberta, Canada and in Kentucky, USA.
ABOUT WHL ENERGY LTD. - www.WHLenergy.com
WHL Energy Limited (WHL) is an Australian publicly-listed company focused on developing and commercializing energy assets including wind energy and clean fossil fuels (natural gas).
For more information please contact:
Gale Force Petroleum Inc.
Michael McLellan, +1.514.333.9292, MMcLellan@GaleForcePetroleum.com
WHL Energy Ltd.
Peter Bartter, +612.6961.9821, Peter.Bartter@Bartter.com.au
Forward looking statements:
Statements included herein, including those that express management of Gale Force Petroleum or WHL Energy’s expectations or estimates of their respective future performance, constitute “forward-looking statements” within the meaning of applicable securities laws. Forward-looking statements – especially but not limited to any geological or reservoir information not supported by a NI 51-101 report – are based on assumptions and estimates that are subject to various risks and uncertainties including but not limited to geological risk, engineering risks, market risk and the risks disclosed under the heading “Business Risks” in Gale Force Petroleum periodic filings with Canadian securities regulators available on SEDAR and and WHL Energy’s periodic filings with Australian securities regulators. Such information contained herein represents Gale Force Petroleum, or WHL Energy’s best judgment as of the date hereof based on information currently available. Gale Force Petroleum and WHL Energy do not assume the obligation to update any forward-looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.
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