Shoal Point Energy Ltd.

Shoal Point Energy Ltd.

September 26, 2011 09:30 ET

Shoal Point Reaches Agreement to Acquire Canadian Imperial Venture Corp's Interests in West Newfoundland Oil-In-Shale Project and Provides Update on Well 3K-39 and Other Corporate Developments


- Shoal Point Energy Ltd. ("Shoal Point") has agreed to acquire all of Canadian Imperial Venture Corp's ("CIVC") interest in the West Newfoundland Green Point Oil-In-Shale project. Shoal Point has agreed to pay to CIVC the following:

-- 20 million common share units (subject to a 4 month hold), with each unit comprising one common share and one-half common share purchase warrant at $0.40 for 2 years

-- $500,000 in cash over 6 months

-- in addition, all debts owing to Shoal Point by CIVC in respect of Well 3K-39 will be cancelled

- Shoal Point has engaged Gaffney Cline & Associates of Houston, TX to prepare an initial resource estimate report covering all its Green Point acreage

- Core analysis and imaging indicates extensive and pervasive natural fracturing

- Shoal Point expects to commence the testing and completion of Well 3K-39 in the middle of October

TORONTO, ONTARIO--(Marketwire - Sept. 26, 2011) - Shoal Point Energy Ltd. ("Shoal Point") (CNSX:SHP) announces that it has signed an agreement with Canadian Imperial Venture Corp ("CIVC") to acquire all of CIVC's interests in the West Newfoundland oil-in-shale project. The purchase includes the 19.25% interest in EL 1070, site of the recently-drilled Shoal Point 3K-39 well, CIVC's interest in the Farmin Agreement regarding EL 1120, and, CIVC's interest in the regional Area of Mutual Interest Agreement which had been signed on April 13, 2011.

The completion of this transaction will give Shoal Point a 100% working interest in the shallow rights covering the approximately 150,000 acres of Green Point shale in EL 1070 and an 80% working interest in the 67,298 acres of Green Point shale in EL 1120 upon satisfying the terms of the Farmin Agreement with Ptarmigan Energy Ltd., which has been described in earlier press releases. Shoal Point will also be free to acquire other property interests in the area on its own.

The consideration to be paid to CIVC is 20 million units, one unit consisting of one common share and one-half common share purchase warrant, where a full warrant allows the holder to acquire an additional common share at a price of $0.40 for 2 years. In addition, Shoal Point will pay to CIVC $300,000 on closing, a further $200,000 (or 1 million common shares at the option of Shoal Point) 6 months after closing. Pursuant to this agreement, the current obligations of approximately $2.6 million owed by CIVC to Shoal Point in respect of exploration costs related to Well 3K-39 will be cancelled. Shoal Point has also agreed that as part of this transaction, CIVC has the right to nominate one person to the Board of Shoal Point.

This transaction is subject to the approval of the shareholders of CIVC which is anticipated to occur at a shareholders meeting that CIVC has called for October 24, 2011. The transaction has been endorsed by the Board of Directors of CIVC and by its former President, Mr. Steven Millan. The transaction is also subject to approval by all applicable regulatory authorities. Closing of this transaction is anticipated to occur on October 25, 2011.

Resource Estimate Report

Shoal Point has engaged the services of Gaffney Cline & Associates to prepare a resource estimate report for the entirety of its Green Point oil-in-shale lands, approximating 217,298 acres, and including, subject to successful conclusion of this agreement, the 100%-owned EL 1070, and the adjoining EL 1120, on which Shoal Point will have the right to earn an 80% working interest. This initial report is anticipated to be completed by November 2011.

The above study will also be integrated into an updated National Instrument 51-101 report by Gaffney Cline which will allow the Company to apply for listing on the Toronto Stock Exchange by the end of the year.

Gaffney, Cline & Associates is a global consultancy offering technical, commercial and strategic advice to the petroleum sector, and has over 400 technical and commercial advisory staff members in eleven offices worldwide.

Well 3K-39 Update

Shoal Point announced on July 26, 2011 that it had drilled to a depth of 1745 metres and run casing to 1711 metres. The planning of and approval for the well completion and testing program is still being finalized and the Company expects to commence this within the next 20 days upon the arrival of a service rig on site. This next stage will include deepening of the well to an anticipated depth of 2200 metres, and two types of testing:

(1) bottom hole testing of potentially oil-bearing carbonate-rich units, as correlated with other wells in the area, and

(2) perforation of highly fractured units which indicate hydrocarbons from logs, cores, drill cuttings, and permeability from a successful short-term open-hole closed chamber test, as reported earlier.

The drilling and testing operation is expected to take up to 5 weeks to complete.

Update on Core Analysis, 3K39

The Company has received the initial results of analysis of approximately 26 metres of core by Ingrain Digital Rock Physics Lab in Houston, Texas. A 3-D digital core scanning and imaging study displays pervasive and systematic fracturing and therefore supports preliminary observations from the well, particularly log invasion profiles and the results of open-hole testing, that significant natural permeability is present. In addition, this technique provides density and atomic number measurements, which are being integrated with other petrophysical data to study reservoir quality. A second phase of core study will involve detailed sampling and measurement of reservoir quality and hydrocarbon saturation within coarsening-upward sedimentary cycles; such cycles are numerous in the Green Point and contribute to its extraordinarily thick gross pay section. This information will allow optimum future targeting of test and completion intervals.

About Shoal Point Energy Ltd.

Shoal Point Energy Ltd is a public company earning a 100% interest in Exploration Licence #1070 in the Province of Newfoundland comprising approximately 150,000 acres of oil-in-shale. In addition, Shoal Point has an agreement to earn a net 80% interest in the 67,298 acres of Green Point Shale (shallow rights) of EL 1120 which is owned by Ptarmigan Energy Corp.

In addition, Shoal Point has a 6 - 14% interest in a gas prospect in the Province of New Brunswick.

Shoal Point currently has 176,486,812 common shares issued and outstanding.

Except for historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated due to a number of factors and risks. The forward looking statements contained in this press release are made as of the date hereof and Shoal Point Energy Ltd. undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

Contact Information

  • Shoal Point Energy Ltd.
    David Black
    416-637-2181 ext 308

    Shoal Point Energy Ltd.
    R. Brian Murray