CALGARY, Jan. 22 /CNW/ - Richards Oil & Gas Limited (the "Company"), (TSX
Venture: RIX) announces it has significantly increased its Horseshoe Canyon
Coalbed Methane ("CBM") land holdings at Thorsby Alberta through a combination
of a Crown land acquisition and the execution today of a farmin agreement with
a large integrated oil & gas company.
Crown Land Acquisition
At the November 14, 2007 Alberta Crown land sale, the Company acquired
100% interest in two sections adjacent to the Company's original lands.
On January 22, 2008 the Company executed a farmin agreement representing
a five well drilling commitment to earn a 100% working interest on five
sections that are adjacent with the Company's current landholdings. Under the
terms of the agreement, the Company has the option to earn up to nine
additional surrounding sections with the drilling of additional wells.
If the Company elects to drill all of the earning and option wells under
the farmin agreement its interests in the Thorsby property will increase from
nine gross (four net) sections to 23 gross (18 net) contiguous sections. Full
development of this land position would provide the Company 92 future drilling
locations at an average working interest of 79%.
The Company's technical management has identified the Thorsby area as
being prospective for natural gas production from the Horseshoe Canyon coals
and conventional natural gas production from the Edmonton and Belly River sand
channels. The Company currently has one Horseshoe Canyon CBM well producing
(gross) at 100 mcf per day in the area and in December 2007 drilled and
completed four additional wells. Flow test and tie-in activity for these
additional wells is currently underway. The coal seams in this area are
relatively consistent based on existing well control which increases the
probability of success of future wells. The Edmonton and Belly River sands
represent additional economic upside to the Company from the Thorsby area.
Richards Oil & Gas Limited (www.richardsoilandgas.com) is a Calgary-based
exploration company, involved in the development of crude oil and natural gas,
with an emphasis on the exploitation of coal bed methane (CBM). With a
significant land base and industry-leading experience in the development of
CBM projects, the Company is at the forefront of the CBM industry in Western
Canada. The Company is able to capitalize on opportunities that create both
short-term cash flow and long-term value for its shareholders.
Coalbed Methane (CBM) or Natural Gas from Coal (NGC) is technically
defined as gas produced naturally by coalification, and found within coal
natural gas reservoirs consisting predominately of methane, with smaller
amounts of higher hydrocarbons, water vapor, nitrogen, carbon dioxide, or
other non-hydrocarbons. The majority of gas is usually physically sorbed
within the microporosity and mesoporosity within the organic matrix. The
Company's management has extensive experience in the development of CBM
projects, which it is using to exploit the Company's land base and to add and
sustain significant value for its shareholders.
BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Statements in this news release contain forward-looking information
including expectations of future production, procurement of drilling permits,
plans for and results of exploration and development activities and other
operational developments. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, as a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company. These
risks include, but are not limited to; the risks associated with the oil and
gas industry, commodity prices, and exchange rate changes. Industry related
risks include, but are not limited to; operational risks in exploration,
development and production, availability of skilled personnel and services,
failure to obtain industry partner, regulatory and other third party consents
and approvals, delays or changes in plans, risks associated with the
uncertainty of reserve estimates, health and safety risks and the uncertainty
of estimates and projections of reserves, production, costs and expenses. The
reader is cautioned not to place undue reliance on this forward-looking
information. The forward-looking statements contained herein are subject to
change. Except as required by applicable securities laws, the Company assumes
no obligation to update or revise any forward-looking statements should
circumstances or management's opinions or estimates change.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news release.
For further information:
For further information: Brad Turner, President & CEO, Richards Oil &
Gas Limited, Tel: (403) 265-8444, E-Mail: firstname.lastname@example.org; Lonn
Bate, CFO, Richards Oil & Gas Limited, Tel: (403) 265-8444, E-Mail: