22 Jun 2012 07:28
22 June 2012 Red Emperor Resources NL ("Red Emperor" or "the Company") Puntland Drilling Update
Red Emperor Resources NL is pleased to announce that the Shabeel North well currently being drilled in Puntland by Joint Venture partner and operator, Horn Petroleum Corp. , is at a current depth of 984m targeting a total depth of 2,400m. Drilling operations have progressed smoothly since spudding and remain on track to reach target depth on time and on budget.
The Shabeel North well is targeting Upper Cretaceous Jesomma sands, which had good oil and gas shows in the Shabeel-1 well 3.5 kilometers to the south. Petrophysical analysis of downhole electrical logs in the Shabeel-1 well indicated a potential pay zone in the Jesomma of up to 12 to 20 meters with an average porosity of 18 to 20%. Upon completion and testing of the Shabeel North well, the rig will move back to Shabeel-1 to flow test the identified Jesomma sands.
Corporate
The Company advises that it has entered into an underwriting agreement with Max Capital Pty Ltd ("Max") with respect to its unlisted options exercisable at A$0.30, expiring on the 30th June 2012. A total of 7,750,000 options will be fully underwritten by Max, raising the Company A$2.32m, further enhancing its strong cash position. Max will be paid a 6% underwriting fee. The underwriting agreement also contains termination rights for the underwriter which are usual for an agreement of this nature including termination on certain market index movements or material adverse events.
For further information please visit www.redemperorresources.com or contact:
Red EmperorGreg Bandy +61 8 9225 2826Rebecca Sandford +44 20 7025 7040Cairn Financial Advisers LLP (Nominated Adviser)Jo Turner / Tony Rawlinson +44 20 7148 7900Fox-Davies Capital Limited (Joint Broker)Daniel Fox-Davies / Richard Hail +44 20 3463 5000Old Park Lane Capital plc (Joint Broker)Luca Tenuta / Michael Parnes +44 20 7493 8188Tavistock CommunicationsEd Portman +44 20 7920 3150
Background
Red Emperor Resources NL is a natural resources exploration company with interests in the frontier state of Puntland, Somalia and the Republic of Georgia.
* In Puntland, Red Emperor holds a 20% working interest in the Dharoor and Nugaal Valley Production Sharing Agreements ("PSA's") along with Horn Petroleum Corp. and Range Resources Limited . These two exploration areas cover over 36,000km2. Horn, the operator and 60% interest holder, has completed drilling the first well (Shabeel-1) in a two well program and has now spudded the second well (Shabeel North). Target Depth for Shabeel North is 2,400m with the primary target being Upper Cretaceous Jesomma sands, which had good oil and gas shows and 12 - 20m of potential net pay in the Shabeel-1 well 3.5 kilometers to the south. Shabeel-1 will be flow tested following completion of Shabeel North. * In the Republic of Georgia, Red Emperor has a 20% working interest in onshore blocks VIa and VIb, covering approx. 6,500km2. Joint Venture partner Range Resources Limited previously funded a 410km 2D seismic program with independent consultants RPS Energy identifying 68 potential structures containing an estimated 2.045 billion barrels of undiscovered oilâ€"inâ€"place (on a mean 100% basis) with the first (Mukhiani-1) of two conventional exploration wells having spudded in July 2011. The Joint Venture is now focussing on a revised development strategy that will target low-cost, shallow appraisal drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli") coal deposit, which straddles the central sections of the two blocks.
XLON