DALLAS, June 17 /CNW/ - Saxon Oil Company Ltd ("Saxon") (TSX VENTURE:
SXN) (FRANKFURT:SXN) (BERLIN:SXN) (PINK SHEETS:SXNOF) has several noteworthy
projects that will continue lead to improving cash flows, improved financial
performance and increased shareholder value in the second half of 2008. Saxon
currently has production totaling more than 251 bbl of oil equivalent per day
(Boepd) from wells located in Texas, New Mexico, North Dakota, Oklahoma, and
Kansas, compared to 80 Boepd at the beginning of 2007. Saxon, through its
wholly owned subsidiary, Central Kansas Gas Gathering System, now owns 240
miles of gas gathering systems in central Kansas. In addition, Saxon owns a
20% membership interest in AleAnna Resources LLC ("AleAnna"), which has a
significant acreage position in the Po Valley, Italy.
In May 2008, Saxon announced the successful completion of the Eumont
State No. 1 exploratory well in Lea County, New Mexico. The well flowed at
daily rates exceeding 500 barrels of oil per day (bopd) with no water through
a 48/64-inch choke during the first 24 hours of sustained production through
perforations from 3,962 to 3,968 ft in the Seven Rivers formation. The well
continues to flow at more than 200 bopd through a smaller 16/64-inch choke.
Saxon has a 15% working interest in this well, which has oil sales of over
8,000 barrels in the first 30 days of production.
Saxon is pleased with this oil discovery, not only with the initial high
flow rate, but because it is flowing oil to the surface under its own
pressure. Typically in New Mexico a newly completed oil well immediately
requires some type of artificial lift to bring the oil to the surface. The
Eumont well opens up a whole new area of exploration and development
opportunity for Saxon. Saxon has identified at least three offset locations
for development drilling.
In Oklahoma, the Williams 3-9 well was originally drilled and completed
in January 2008 in the Red Fork F sand. The well was recompleted into the
primary objective, the Red Fork D sand, in June 2008. The well is now
producing more than 2.4 MMcfd of natural gas and 20 Bopd. Saxon owns a 4.4%
working interest in the well. The operator plans to commingle production from
the D and F sands in the near future. At least two offset locations have been
identified for development drilling.
In Kansas, the Castle Resources Cheney No.4 re-entry well has been
successfully completed. The well has been steadily increasing in oil
percentage and rate and currently has stabilized production of 7 bopd. The
well was completed with coiled tubing horizontal laterals that Saxon has
successfully used in its Walker and Stull wells in Kansas. Saxon owns a 25%
working interest in the Cheney well, which is located in Gove County near
existing producing Saxon properties. Saxon is continuing to monitor the
performance of the wells completed with the laterals and anticipates
additional workovers in existing Saxon-operated Kansas wells.
Also in Kansas, Saxon Oil, through its wholly owned subsidiary, Central
Kansas Gas Gathering Company, LLC ("CKGG"), acquired an additional 125 miles
of gas gathering systems in central Kansas, bringing the total network of
gathering systems CKGG controls to over 240 miles effective July 1, 2008.
Acquired in June 2008, the new gas gathering systems, totaling
approximately 125 miles of pipe, are in Harvey, Kingman, McPherson, Pawnee,
and Reno counties. The largest system is approximately 48 miles of pipe and
includes compression facilities. The systems are located just to the east and
west of Saxon's existing 100-mile gathering system, which stretches across
McPherson, Rice and Barton counties.
These newly acquired gathering systems more than double the miles of pipe
CKGG owns in central Kansas. Unlike the first system Saxon acquired, which was
shut in when Saxon took it over in June 2007, these new systems are
operational, generating cash flow. In addition, CKGG is reactivating its first
system and will begin gathering gas under a new gas purchase contract within
the next 10 days.
Saxon's strategy combines upstream E&P operations with the acquisition
and operations of gas gathering and processing systems will maximize the
profitability of both market segments. With gas prices where they are today,
the opportunities for Saxon and CKGG look even more attractive than they did a
year ago when CKGG made its first acquisition.
In May 2008, AleAnna (of which Saxon owns a 20% membership interest)
received formal approval from the Italian Ministry of Economic Development for
the Corte dei Signori exploration application. The granting of this official
decree by the Ministry of Economic Development is a major step for AleAnna.
Plans are underway to shoot 3d seismic this fall with drilling to follow after
evaluation of the seismic data.
In March 2008, Saxon released results of a resource evaluation on the
prospective resources of Saxon's interest in two permitted areas in Italy.
Chapman Petroleum Engineering, Ltd., completed a Canadian National Instrument
51-101 compliant report on the prospective resources of Saxon's 20% interest
in the Corte Dei Signori and Ponti Dei Grilli permits in Italy. Chapman's
report assigns a best estimate undiscounted cumulative cash flow of
$50 million (USD) net to Saxon's interest for each field discovered within the
About Saxon Oil Company Ltd:
Saxon Oil Company is a Tier One Texas-based Canadian company, trading on
the TSX Venture Exchange under the symbol SXN. The Company is an independent
oil and gas company engaged in the acquisition, development and production of
oil and natural gas reserves. The Company seeks to deliver strong shareholder
returns through an effective exploration and development program that
incorporates sound business practices with the latest oil field technologies.
The goal is to steadily increase proven reserves of oil and natural gas -
which, in turn, will lead to enhanced cash flows and earnings per share.
This press release includes certain "Forward-Looking Statements" within
the meaning of section 21E of the United States Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact,
included herein, including without limitation, statements regarding plans for
completion, production potential, other targeted areas and expansion and
development plans and objectives of Saxon Oil Company Ltd. are forward-looking
statements that involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate and actual results
and future events could differ materially from those anticipated in such
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy and accuracy of this Release.
For further information:
For further information: Saxon Oil Company, Patrice Nazareno, Toll Free: