TORONTO, July 27 /CNW/ - Exile Resources Inc. (TSX-V: ERI) ("Exile" or the "Company"), today announced a joint venture agreement with Aladdin Middle East Ltd. ("Aladdin"), an independent oil and gas exploration and production company with operations located in Turkey. Under the terms of the joint venture agreement, Exile will farm-in to five blocks all operated by Aladdin, referred to as the Rubai licenses, located in eastern Turkey.
"We are pleased to be working in this joint venture with Aladdin, which is a step towards further diversifying our asset base through low-risk, near-term development," said Tony Henshaw, CEO of Exile Resources. "As we extend our operational focus, we evaluate and recognize opportunity in assets beyond Sub-Saharan Africa. The Rubai licenses are an excellent example of this and we view Turkey as a good environment, both operationally and politically, in which to grow our business. Along with near-term cash flow that early-stage production could provide, the deal presents significant exploration potential on the blocks themselves and further afield as they are close to very large identified fields across the borders in Iraq and Syria. Through the agreement we are able to expand our already high-quality network of contacts by being able to work with Aladdin, an established and reputable company that has been operating in Turkey for the past 50 years."
Late last year, Aladdin drilled the crude oil discovery well NE Ogunduk-1 on the Rubai licenses, from which oil samples were recovered but the well was not ultimately tested. The first phase of the joint venture between Aladdin and Exile will see Exile contribute $600,000 for the re-entry and testing of NE Ogunduk-1, using an Aladdin drilling rig and personnel. Aladdin will remain the operator of the well and Exile will hold a 5% interest in the licenses. If the well tests at a specified target rate, Exile will enter the second phase of the joint venture.
The second phase involves drilling a new appraisal well called NE Ogunduk-2 that will be located up-dip on the same structure as NE Ogunduk-1, and drilled on a turn-key basis by Aladdin. Exile's share of the drilling costs will be US$1.2 million. This would earn the Company an additional 7% interest in the licenses (for total post-stage two interest of 12%). If the NE Ogunduk-2 appraisal well is successful in proving the Ogunduk field, the third stage of the joint venture may proceed.
The third stage provides Exile with the option to earn an additional 23% in the Rubai licenses (for total interest of 35%) by fully funding a further appraisal well on a location to be agreed upon by Exile and Aladdin. The third well will be drilled on a turn-key basis by Aladdin and fully funded by Exile.
In addition to the NE Ogunduk wells, there are a number of other prospects within the blocks which could be drilled in the future. A commercial discovery at NE Ogunduk could be put into production quickly, with the oil transported by truck for sale to the nearby Batman refinery.
About Aladdin Middle East
Aladdin Middle East Ltd. ("Aladdin" or "AME") is an independent American oil and gas exploration and production company formed in 1961 for crude oil exploration in Turkey and has been active in the country since inception. Aladdin's corporate offices are located in Wichita, Kansas, with operational headquarters located in Ankara, Turkey. Aladdin holds more than 1,800,000 acres of onshore exploration licenses mainly in the Southeast Turkey Basin (North Arabian Shield) and in the Thrace Basin. Their holdings make AME the largest concession operator in the country among foreign petroleum right-holding companies.
About Exile Resources Inc.
Exile Resources Inc. is an oil and gas exploration company advancing the development of the Akepo Oilfield in the shallow water Niger Delta, Nigeria. With significant experience and track record of success in international operations, the Company is pursuing additional prospects in Africa and beyond, looking for opportunities that are early on in the exploration and development value chain. Please visit Exile Resources web site for further information: www.exileresources.com.
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Forward-Looking Statements - Certain information set forth in this news release may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of Exile Resources Inc. including, but not limited to the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with the uncertainty of estimates, currency fluctuations, independent actions of its joint venture partners, dependence upon regulatory approvals, the availability of future financing and exploration risk. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE EXILE RESOURCES INC.
For further information: For further information: Exile Resources Inc., Graham C. Warren, CFO, Tel.: (1) 416-362-5772, Graham.Warren@exileresources.com; Exile Resources Inc., Tony Henshaw, President & CEO, Tel.: (44) 20-7793-2592, Tony.Henshaw@exileresources.com; The Equicom Group, Heidi Christensen Brown, Account Executive, Tel.: (1) 403-218-2833, firstname.lastname@example.org