DALLAS, September 9 /CNW/ - Saxon Oil Company Ltd. ("Saxon") (PINK
SHEETS:SXNOF) (TSX VENTURE:SXN) (FRANKFURT:SXN) (BERLIN:SXN) has completed the
acquisition of working interests in 17 oil and gas leases with 26 wells
operated by Castle Resources Inc. of Schoenchen, Kansas, for $2,170,004 USD in
cash. The purchase includes all wellbore and surface equipment, as well as 3-D
seismic surveys of the acquired acreage.
Located in north central Kansas, these wells typically produce from the
Lansing-Kansas City or Arbuckle formations at depths ranging from 3,100 to
4,400 feet. Saxon, which acquired working interests varying from 59% to 89% in
these wells, will act as operator for all 17 leases. Based on the wells actual
production history, as reported by the Kansas Corporate Commission in April
2007, these wells averaged 94 barrels of oil per day (BOPD). The net
production to Saxon's acquired interest is approximately 58 BOPD.
The acquisition is important to Saxon's growth strategy for several
reasons. First, these producing oil assets increase Saxon's reserves base and
monthly cash flow. Second, before this acquisition Saxon's production was
primarily natural gas; because the acquired wells are all oil producing wells,
Saxon's portfolio of production has become more evenly balanced between oil
and gas. And third, the acreage acquired with these leases provide Saxon with
a number of exploration and development drilling opportunities.
"Before this acquisition, Saxon was averaging 75 barrels of oil
equivalent (BOE) per day," commented Steven D. Moore, CFO of Saxon Oil, who
handled negotiations on behalf of Saxon. "About 85% of that production was
natural gas. With this acquisition, we've increased our daily production by
approximately 75%, and all this acquired production is crude oil. So going
forward our daily production will be evenly divided between crude oil and
natural gas, which should reduce risk and smooth out variances in monthly cash
flow caused by the volatility of natural gas prices."
"Saxon has already started a maintenance and workover program on the
wells, which should cut monthly lease operating expenses while boosting
production," said Richard G. Green, President and CEO of Saxon Oil. "Further,
we've also performed preliminary geological and reservoir engineering studies
from the 3-D seismic surveys we acquired and have identified six to eight very
drillable new well locations."
Earlier in the month, Saxon acquired a 100% working interest in the
Pfannenstiel "B" oil and gas lease from Prairie Resources Inc. of Hays, Kan.,
for an undisclosed amount of cash. The lease, in the same general vicinity as
the Castle leases, has four producing oil wells and sufficient acreage for
several development wells (see press release dated September 5, 2007). Saxon
also expects to carry out a 3-D seismic survey on the Pfannenstiel lease and
adjacent acreage to pinpoint the best locations for potential development and
exploratory wells in the area.
Saxon continues to view Kansas is an attractive growth area.
Historically, Kansas ranks fifth among states in the United States in
cumulative production with over 30 trillion cubic feet of gas (Tcf) and over
6.6 billion barrels of oil produced to date. Still, significant oil and gas
reserves remain throughout central Kansas. In addition, central Kansas holds
some of the largest reserves of helium in the world, a quickly depleting
commodity that currently sells for more than $70 per thousand cubic feet.
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
For further information:
For further information: For Saxon Oil Company Ltd. Quayside
Communications Patrice Nazareno, 877-515-7708 email@example.com