CALGARY, ALBERTA--(Marketwire - July 19, 2012) - PRD Energy Inc. (TSX VENTURE:PRD) ("PRD" or the "Company") is pleased to announce that its wholly owned subsidiary, PRD Energy GmbH, has entered into definitive agreements with GDF SUEZ E&P Deutschland GmbH ("GDF SUEZ") to farm into the Boerger-Werlte Oil Pool ("Boerger") located in Lower Saxony, Germany.
Boerger farm in arrangements
Under the agreements, GDF SUEZ will act as operator and PRD will act as drilling and completions subcontractor. PRD is entitled to earn a 50% participating interest in Boerger upon funding all of the costs associated with drilling, completing and testing of one productive re-entry well (estimated at EUR2,500,000) and up to EUR800,000 of the costs associated with a 20 sq. km 3D seismic program. The Company will fund these costs from existing cash balances. Boerger produced approximately 950,000 bbls of oil prior to being suspended in 2003.
The re-entry well is expected to be drilled to a total vertical depth of less than 2,000 metres. This operation will primarily target the Malm formation, a highly permeable and porous conventional zone with a history of oil production. Other potential zones will also be tested. Production from this well would be shared equally between GDF SUEZ and PRD. Initial production will be trucked to a local refinery located in close proximity to the well location. Sales of this 34° API oil are expected to be priced at a small discount relative to Brent Crude. It is anticipated that the re-entry well and seismic will be completed, tested and interpreted on or before the end of the first quarter of 2013.
Upon completion of the farm in, PRD has the right to participate as a 50% working interest partner in Boerger. The Company will contribute capital proportionate to its participation. The Company believes there could be several additional wells in the Malm formation to be defined by the 3D seismic program. In addition, there are four other productive zones at depths less than 2,300 metres in Boerger which have tested or produced oil during previous operations. All of these zones are potentially productive with the application of advanced technologies.
Upon completion of the seismic and interpretation program, the parties will prepare and approve a field development plan for Boerger. It is anticipated that the parties will commence drilling activities on additional wells during the summer of 2013. Reservoir configuration as defined by the 3D seismic program and well productivity, will determine the number of wells necessary to effectively optimize the field.
Michael Greenwood, Chairman and Chief Executive Officer of PRD said "We are excited to be partnering on this field re-development with GDF SUEZ, one of the largest operators in Germany, as we execute our strategy in the Northwest German Basin. We believe that Germany presents a compelling opportunity for our Company. We look forward to continuing to invest in Germany, grow our local presence and to operate in a safe and environmentally responsible manner."
PRD has chosen to focus its development activities in Germany based on, among other things, attractive geological opportunities, government stability, competitive royalty regime, infrastructure in place and the ability to develop significant oil and gas pools that are mature field opportunities with low exploration risks and short timeframes to production. PRD believes that application of advanced technologies in environmentally safe and responsible manners will generate significant benefits to all stakeholders. PRD has hired German staff and expects to continue to actively grow our team in Germany to advance our projects.
The Company has recently announced the granting of exploration and production permits in Germany totaling 266,000 acres in which it holds a 100% working interest. The Company is currently in negotiations to acquire data pertaining to these fields which would materially accelerate the Company's ability to develop these abandoned fields into producing oilfields. PRD also continues to discuss additional farm-in arrangements with operators in Central Europe.
About GDF SUEZ
GDF SUEZ develops its businesses around a model based on responsible growth to take up today's major energy and environmental challenges: meeting energy needs, ensuring the security of supply, combating climate change and optimizing the use of resources. The Group provides highly efficient and innovative solutions to individuals, cities and businesses by relying on diversified gas-supply sources, flexible and low-emission power generation as well as unique expertise in four key sectors: liquefied natural gas, energy efficiency services, independent power production and environmental services. GDF SUEZ employs 218,900 people worldwide and achieved revenues of EUR90.7 billion in 2011. The Group is listed on the Brussels, Luxembourg and Paris stock exchanges and is represented in the main international indices: CAC 40, BEL 20, DJ Stoxx 50, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe, ASPI Eurozone and ECPI Ethical Index EMU.
About PRD Energy
PRD Energy Inc. is a Calgary based oil and gas company engaged in the exploration, development and acquisition of, natural gas and crude oil, principally in Europe. PRD's common shares are listed on the TSX Venture Exchange with the symbol "PRD".
Forward looking information
This news release contains forward-looking information relating to the farm-in on Boerger, including project plans, costs, benefits and production, future plans for the Company's business and operations, and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.
Forward-looking information is based on certain factors and assumptions regarding, among other things, the impact of increasing competition; the general stability of the economic and political environments in which the Company operates or owns interests; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability to operate in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion and the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with instability of the economic and political environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, the inability to settle the definitive terms of the farmout arrangements, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.
You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.