ZOL.L Regulatory News (ZOL)

14 Jul 2006 14:13

Crosby Capital Partners Inc14 July 2006 IB DAIWA MAKES REGULATORY ANNOUCEMENT CONFIRMING COMPLETION OF DRILLING AT BIG MOUTH BAYOU Shareholders in Crosby Capital Partners Inc. ("Crosby") should be aware that IBDaiwa Corporation ("IB Daiwa") has today issued the following regulatoryannouncement via the TDNET service inJapan._______________________________________________________________________________ Lodore Resources confirms successful exploratory drilling at Big Mouth Bayou Discovery of Commercially Exploitable Gas at CR Sands IB Daiwa Corporation ("IB Daiwa") today confirmed the completion of drilling atthe Millrich Properties LLC #1 well on the 4,500 (18.21 km2) acre Big MouthBayou project which is located in southern Louisiana, USA and in which it has a40% interest. The total depth to which the Millrich Properties LLC #1 well was drilled is19,490ft (5,940m). A number of oil and gas bearing sands were encountered duringthe drilling process, and after a period of review and study of the extensivedata that has been acquired by a third party, IB Daiwa and its joint venturepartners decided that the gas bearing sands referred to as CR sands (Chris R-1and R-2), which occurred at a depth of approximately 15,400ft (4,693m), shouldbe brought into production from this well. Size of the CR sands and reserve Based on the preliminary analysis by the operator of data obtained from MillrichProperties LLC #1 well, the well contains at least 10 bcfe (283 million cubicmetre) of gas reserve. As a result of the high quality geological features ofthe CR sands, it is concluded that the CR sands are commercially exploitable. Awell is considered as commercially exploitable if the expected revenue derivedfrom the well is greater than the cost of extraction. The CR sands extend over an area of several hundred acres and it is estimatedthat further development wells (such as #2 well) may be drilled to fully exploitthe reserves that have already been identified. After that, the full extent ofthe reserves contained in the CR sands can only be confirmed from data obtainedafter production has started and a reserve audit by an independent reserveauditor has been completed. Commencement of production The current plan is to obtain the necessary permits for production andimplementation of production facilities and pipelines, and complete varioustests and analysis, including possible flow rates, prior to bringing the wellinto production, which is currently anticipated to be in the first calendarquarter of 2007. If there is any delay in the installment of productionfacilities due to adverse weather conditions, the date of commencement ofproduction may be changed. We will make an announcement accordingly when thereis a more definitive production schedule. Daily flow rates At this stage we estimate that gas from Millrich Properties LLC #1 well willflow at a rate of 15 mmcf to 20 mmcf (424,800 m3 to 566,300 m3) per day. Thefinal flow rates will be confirmed via flow tests(1) upon completion of the welland implementation of the production facilities. The above flow rate is apreliminary estimate made by the operator after considering the geologicalfeatures and pressure of similar CR sands in the Louisiana region, and it hasnot been finalized yet. In addition, the daily flow rates may be increased after the implementation ofmore development wells which are being planned. We will announce a more precisedaily flow rate in due course. (1) The flow tests referred to herein means tests conducted on the gas containedin the well, which are similar to tests carried out on oil fields. Gas samplesare collected at the surface after completion of the exploration and developmentwells, and tests are conducted on the well productivity, sub-surface pressureand sub-surface temperature, etc. Impact to the consolidated results for the current period At the present time it is still uncertain how production from MillrichProperties LLC #1 well will impact the forecast of our consolidated results forthe current fiscal year. Once we can confirm more definitive data we will makean announcement accordingly. Drilling cost The drilling cost for the Millrich Properties LLC #1 well has been funded by theproceeds from the farm-out agreement entered into by Coniston InternationalCapital Limited and Lodore Resources on 9 March 2006. For further information on the farm-out agreement, please refer to the newsrelease dated 9 March 2006. (http://www.c-direct.ne.jp/japanese/uj/pdf/10103587/00043656.pdf) Costs after completion After completion of the well, the costs in relation to the installation ofpipelines, implementation of further development wells and costs of operationand production will be borne by all three joint venture partners in accordancewith their working interests. Hence, Lodore Resources will be responsible for40% of such costs. At this stage, it is uncertain what the exact amount of costswould be. 1. Outline of the exploratory well: Millrich Properties LLC #1 a) Location: Onshore in south Louisiana, USA b) Prospect: Big Mouth Bayou Prospect c) Area: Approximately 4,500 acres (18.21 sq. m) d) Drilling commencement date: 17 January 2006 e) Depth of excavation: 19,490 feet (approximately 5,940 m) 2. Joint venture partners (working interest) a) Pel-Tex Oil Company LLC: 25% b) Coniston International Capital Limited: 35% c) Lodore Resources Inc: 40% 3. Outline of Lodore a) Name: Lodore Resources Inc. b) Representative: Robert Charles Williams c) Registered address: George Town, Cayman Islands d) Date established: 21 September 2004 e) Business purpose: Exploration and production of oil and gas f) Year end: 31 December g) Staff: 6 h) Main office: Singapore Attachment: News release dated 9 March 2006 (http://www.c-direct.ne.jp/japanese/uj/pdf/10103587/00043656.pdf) ________________________________________________________________________ Crosby holds, through two wholly owned subsidiaries, 24.08% of the issued sharecapital of JASDAQ listed IB Daiwa. Crosby would also like to draw shareholders' attention to the regulatoryannouncement and press release issued today on the same topic by TechpacificCapital Limited ("Techpacific"). Techpacific has a direct 35% working interestin the Big Mouth Bayou acreage. The announcement and press release are availableon www.techpcific.com. For further information please contact: Simon Fry, CEO, tel. +44 207 590 2800 Steve Fletcher, COO, tel. +44 207 590 2803 This information is provided by RNS The company news service from the London Stock Exchange