GeoGlobal Resources Inc.
AMEX : GGR

GeoGlobal Resources Inc.

January 22, 2007 13:30 ET

GeoGlobal Resources Inc.: KG Exploration Block Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 22, 2007) - GeoGlobal Resources Inc. (the "Company" or "GeoGlobal") (AMEX:GGR) today provided an update on the exploration activities of the Gujarat State Petroleum Corporation ("GSPC" or the "operator") as operator of the exploration block KG-OSN-2001/3 ("KG Block").

With the completion of testing of Object 4, the testing of the KG#15 well has now been completed. Object 4 involved the testing of 33 meters of perforations over the interval depth of 4,464 to 4,587 meters measured depth at a stabilized flow rate of 8.5 million standard cubic feet per day ("MMFSCD") of gas and 55 barrels per day ("BBL/day") of condensate, at a flowing well head pressure ("FWHP") of 3,893 psi through a 20/64 inch choke. The testing results of Object 3 were previously announced on December 28, 2006.

The KG#15 operations are currently in the process of being suspended. It is anticipated that drilling of the next well, the fourth from the KG#8 platform will commence the beginning of February. This new well, denominated as the KG#28 well will be drilled directionally to a total vertical depth ("TVD") of 5,500 meters deviating approximately 1,500 meters East of the KG#8 platform. The KG#28 will be the sixth well drilled by the Saipem Perro Negro 3 jack-up drilling rig of the ten wells contracted.

As previously announced, GSPC has entered into a 25 month contract with Atwood Oceanics Inc., a Houston based International Offshore Drilling Contractor, for the Atwood Beacon jack-up drilling rig to drill additional exploration wells on the KG Block.

On January 3, 2007 GSPC spud the KG#16 well, which is the first well to be drilled using the Atwood Beacon. The KG#16 well is situated approximately 5 kilometers East of the KG#8 platform where the Saipem Perro Negro 3 jack-up drilling rig is located. The KG#16 well is being drilled vertically to an intended depth of 5,500 meters TVD in shallow waters of approximately 109 meters to further delineate the extent of the KG structure.

The Company further announced that GSPC has entered into a contract with Essar Oilfield Services Limited ("EOSL"), a subsidiary of Essar Shipping & Logistics Ltd. of Cyprus, for a semi-submersible rig named "Essar Wildcat". The Essar Wildcat is a self propelled drilling rig suitable for deployment in water depths of 400 meters and has a drilling depth capacity of 7,600 meters. GSPC intends to commence drilling additional wells in the deeper water in the KG Block by April 2007. The initial term of the contract is for two years from the date of spud of the first well, with the option of two extensions, each for one year.

Mr. Jean P. Roy, President and CEO of GeoGlobal stated "We are very excited to soon have three rigs drilling concurrently in the KG Basin. The Atwood Beacon is currently drilling the KG#16; the Saipem rig should spud the KG#28 by the first part of next month; and the Essar Wildcat should be in a position to spud our first well in deep water by mid year 2007. The increased activity on this block shows the commitment and determination of GSPC to fulfill our KG drilling obligations and to place the Deen Dayal field on production as soon as possible."

GeoGlobal also announced that it has been advised by Mr. Roy, that he has transferred, by way of a gift, 500,000 shares of GeoGlobal from his personal holdings to the Gujarat Energy Research & Management Institute ( www.germi.org ) in Gandhinagar, India. Following this transaction, Mr. Roy owns 32,016,000 shares or approximately 48.30% of the shares presently outstanding. The gifted shares are restricted in further transfer until January 12, 2008 and to the extent required under applicable US Securities laws.

Cautionary Statement to Investors

This press release contains statements which constitute forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995, including statements regarding the plans, intentions, beliefs and current expectations of GeoGlobal Resources Inc., its directors, or its officers with respect to the oil and gas exploration, development and drilling activities being conducted and intended to be conducted and the outcome of those activities on the exploration blocks in which the Company has an interest. Statements regarding the work commitments to be fulfilled, the surveys to be conducted, and the results of fulfilling those work commitments, the timing and outcome of drilling and testing of wells drilled on the exploration blocks and the timing of any commercial production that may be established are forward-looking statements. There can be no assurance as to the outcome of those surveys conducted, the exploratory drilling and the testing and evaluation that may be conducted or that has been conducted on the wells drilled or as to the quantity of recoverable reserves that may exist in the areas of any wells drilled or when, if ever, that the Company may realize revenues from those wells. The Company's forward-looking statements include the estimated cost and timing of its exploration activities, including the estimated costs of fulfilling its work commitments and any exploratory drilling conducted as a consequence of the outcome of the surveys conducted, the extent of activities conducted and the outcome of those activities.

Investors are cautioned that any such forward-looking statements are not guarantees of the success of the Company's oil and gas exploration, development and drilling activities or the commercial success of any of its wells and the wells the Company may drill involve risks and uncertainties. There can be no assurance as to the outcome of the exploratory well drilling and testing being conducted on the KG Block, or as to the outcome of further testing of wells or as to the success of drilling additional or appraisal wells. There can be no assurance that the entire exploration, development, drilling and testing program presently intended to be undertaken on the KG Block will be completed. These activities are dependent upon the availability of drilling rigs, other services equipment and operating personnel at reasonable prices. There can be no assurance as to their availability which would adversely affect the plans of the operator. The Company's actual results may differ materially from those projected in the forward-looking statements. There are numerous risks and uncertainties involved in the Company's acquisition of unproved minority and majority interests in the exploration areas, including the possibilities that no discoveries of hydrocarbons are made on the exploration blocks or, if discovered, that such discoveries are determined not to be commercially productive. There can be no assurance that the Company's drilling program will be successful or that the entire program on any exploration block will be drilled. There can be no assurance that the Company's estimates as to the time to fulfill work commitments and complete drilling operations will be accurate. The blocks are highly speculative exploration opportunities and pursuing the development of the exploration blocks involves material risks to the Company. The Company's interests in its exploration blocks are participating interests and there can be no assurance that such funds as are required to meet the Company's obligations under the production sharing contracts will be available to the Company in the amounts and when required. The Company's failure to have such funds available at the times and in the amounts required could materially adversely affect the fulfillment of the Company's business plans and its interest in those exploration blocks.

The first phase of the exploration period relating to the production sharing contract for the KG Block has expired, as extended on August 29, 2005 through March 11, 2006, without the required minimum of at least fourteen wells being drilled during the first phase. On February 24, 2006, the management committee for the KG Block recommended a further extension the first phase of twelve months to March 11, 2007. As at January 22, 2007, approval of this extension from the Government of India is still outstanding. Unless this further extension is granted, the Company may be liable for consequences of non-fulfillment of the minimum work commitment in a given time frame under the PSC. The PSC has provisions for termination of the PSC on account of various reasons specified therein including material breach of the contract. Termination rights can be exercised after giving ninety days written notice. This failure to timely complete the minimum work commitment, though there is no precedence, may be deemed by the Government of India to be a failure to comply with the provisions of the contract in a material particular. The Company has been advised by the operator that it is unaware of any precedent for such an occurrence. The termination of the PSC by the Government of India would result in the loss of the Company's interest in the KG Block other than areas determined to encompass "commercial discoveries". The PSC sets forth procedures whereby the operator can obtain the review of the management committee under the PSC as to whether a discovery on the exploration block should be declared a commercial discovery under the PSC. Those procedures have not been completed at present with respect to the discovery on the KG Block and, accordingly, as of January 22, 2007, no areas on the KG Block have been determined formally to encompass "commercial discoveries" as that term is defined under the PSC. Additional risks and uncertainties arise out of seeking to do business overseas in India where political and other world events may disrupt the Company's plans and intentions. The presence of hydrocarbon reserves on adjacent or contiguous properties is no assurance or necessary or probable indication that hydrocarbons will be found in commercially marketable quantities on the exploration blocks in which the Company holds an interest. Additional important risk factors are described in the Company's periodic filings with the Securities and Exchange Commission, including the Company's annual report on Form 10-KSB and quarterly reports on Form 10-QSB. The filings may be viewed at http://www.sec.gov. and www.sedar.com.

Contact Information

  • GeoGlobal Resources Inc.
    Allan J. Kent
    Executive VP and CFO
    (403) 777-9253
    or
    GeoGlobal Resources Inc.
    Carla Boland
    Investor Relations and Corporate Affairs
    (403) 777-9253
    (403) 777-9199 (FAX)
    Email: info@geoglobal.com
    Website: www.geoglobal.com