21 May 2012 07:00
21 May 2012 Red Emperor Resources NL ("Red Emperor" or "the Company") Shabeel North - Exercise of Option to Participate
Red Emperor Resources NL is pleased to announce that it has, today, exercised its option to participate in the drilling of the Shabeel North well, schedule to be spud in the first week of June.
As a result of this election to participate, Red Emperor maintains its 20% Participating Interest in each of the Dharoor Valley and Nugaal Valley PSA's.
Red Emperor has always had an option, not an obligation, to participate in Shabeel North and has now received Final Well Logs in relation to the recently drilled Shabeel-1 well. After reviewing these logs and in light of the significant discovery made by the Joint Venture in the Jesomma sands of Shabeel-1, the board has no hesitation in participating in Shabeel North and has advised Africa Oil Corp. accordingly.
Red Emperor has been paying preliminary costs associated with the preparation of drilling Shabeel North and these costs can now be applied towards its cash call commitments.
On 17 May 2012, Red Emperor announced the discovery of a 12 - 20m zone of significant hydrocarbon pay in the Upper Cretaceous Jesomma Formation of the Shabeel-1 well. This discovery will be flow tested after drilling the Shabeel North well as the perforating equipment required to test this zone is currently being shipped to site.
The rig is currently moving to the Shabeel North location, 3.5km north of Shabeel-1, with spudding scheduled for the first week of June 2012. The primary objective of this well will be to evaluate the Upper Cretaceous Jesomma Sands that have been oil-bearing at the Shabeel-1 location.
Greg Bandy, Managing Director of Red Emperor, commented, "We are delighted to announce that we are participating in the second Puntland exploration well and as a result maintaining our 20% interest in this historical Joint Venture. We were very encouraged by the results of the Shabeel-1 well that have confirmed oil-bearing sands in two zones. This discovery has very positive implications for the prospectivity of the basin. We look forward to the results of the Shabeel North well and to testing the Jesomma sands to confirm the potential of the block."
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 +44 20 7148 7900Tony RawlinsonFox-Davies Capital Limited (Joint Broker)Daniel Fox-Davies +44 20 3463 5000Richard HailOld Park Lane Capital plc (Joint Broker)Luca Tenuta +44 20 7493 8188Michael ParnesTavistock CommunicationsPaul Youens +44 20 7920 3150Ed PortmanBackground
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 two licences encompassing the highly prospective Dharoor and Nugaal valleys. These two exploration areas cover over 36,000km2. The operator and 60% interest holder, Horn Petroleum Corp. has completed the first well (Shabeel-1) in a two well program and is now moving the rig to the second well (Shabeel North). The two wells are targeting 300mmbls and 375mmbbls of best estimate Prospective Resources (100% basis). All site construction and preparation work has been completed on the second well and is now in readiness to accept the rig and begin drilling. * 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 Company is now focussing on a revised development strategy that will focus on low-cost, shallow appraisal drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli") coal deposit, which straddles the central sections of the Company's two blocks.
XLON