/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES/
CALGARY, Nov. 2 /CNW/ - RSX Energy Inc. ("RSX" or the "Company") is
pleased to announce that it has entered into three separate agreements for the
sale of its petroleum and natural gas assets in the Willesden Green and
Randell areas of Alberta and the Rigel area of Northern British Columbia. The
total sale price for the three properties is $20.15mm with an effective date
for the sale of November 1, 2007. In the transactions, RSX is divesting
720 Mstboe of total proved reserves and 1221 Mstboe of proved plus probable
reserves as evaluated by GLJ Petroleum Consultants Ltd. effective March 31,
2007 and adjusted for production. The transactions equate to $28.00 per total
proven barrel and $16.50 per proved plus probable barrel. Average production
of 525 Boepd for the 3 areas equates to approximately $38,500 per flowing Boe.
Two of the transactions closed on November 1, 2007 with the third
expected by mid-November.
Proceeds from the sales will be used to partially pay down bank debt and
to fund exploration and development drilling programs in RSX's operated core
areas of Hinton, Boundary Lake and Gold Creek.
At Hinton, Alberta, RSX has participated in the drilling of the well
Cabot RSX Hinton 9-16-51-25 W5M which has been cased to a total depth of 3481m
after 44 days drilling. The Company has a 25% interest in the well which is
expected to be completed in November and tied-in and onstream prior to
year-end. RSX will participate in the drilling of the well Cabot RSX Hinton
13-20-51-25 W5M (RSX 40%) which is expected to spud in late November and take
45 days to drill.
The Company will participate in the completion of the upper zone of the
Spirit River formation in the well Cabot RSX Hinton 9-20-51-25 W5M which began
producing from a lower Spirit River interval in mid-August 2007. RSX has a 40%
working interest in the well. The completion is expected to be finished by the
end of November.
In order to be eligible for the enhanced deep gas royalty incentives
proposed for 2009, RSX intends to drill all future Hinton wells to a depth of
4,000m rather than the current 3,500 - 3,600m. The incremental drilling costs
are offset by deep gas royalty incentives for 4,000m wells. RSX estimates the
effect of the proposed royalty changes to be a decrease of 4 - 5% from current
royalties on the cumulative cash flow of an average Hinton gas well.
RSX (100%) will spud its third well at Boundary Lake in early December
2007. The Company has drilled two successful oilwells in the Kiskatinaw
formation each capable of 200 - 300 Boepd of production. RSX applied for good
production practice in late May 2007 and is currently waiting on approval of
its application from the AEUB. RSX estimates that it has 400 - 500 Boepd of
shut-in oil and solution gas production as both wells at Boundary Lake are
currently subject to production restrictions.
The Company will spud the well RSX Boundary Lake 14-30-85-12 W6M which
will be drilled to approximately 2300m and take 14 days to drill. RSX has a
100% interest in the well. With continued drilling success, RSX expects to
drill two additional development wells to further define the extent of the
Kiskatinaw pool. In light of the proposed changes to conventional oil
royalties, RSX is reviewing the viability of exploration drilling for "new"
Kiskatinaw pools in the Boundary Lake area. Capital dedicated to finding new
pools may be re-deployed to the Hinton area.
This press release contains forward-looking statements, including but not
limited to operational information including drilling projections, production
and capital investment projections. These projections are based on current
expectations and are subject to a number of risks and uncertainties that could
materially affect the results. These risks include, but are not limited to,
risks associated with the oil and gas industry (e.g. operational risks in
development, exploration and production; delays or changes in plans with
respect to exploration or development projects or capital expenditures; and
the uncertainty of estimates and projections in relation to production, costs
and expenses), financial risks such as the risk of commodity price and foreign
exchange rate fluctuations and the risk that equity or debt financing will not
be available to RSX on satisfactory terms and regulatory risks. Due to the
risks, uncertainties and assumptions inherent in forward-looking statements,
prospective investors in the Company's securities should not place undue
reliance on these forward-looking statements.
A boe conversion ratio has been calculated using a conversion rate of six
thousand cubic feet of natural gas to one barrel of oil ("6:1") and is based
on an energy equivalency conversion method applicable at the burner tip and
does not represent a value equivalency at the wellhead.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information:
For further information: RSX Energy Inc., Lee Baker, President, (403)
266-0600, (403) 266-0604 (Fax), Email: firstname.lastname@example.org