Tekoil's Chairman and CEO, Mark Western said: "This is a true milestone in our young company's history, following two and a half years of exhaustive planning. Exploration in western Newfoundland has been one of our goals since inception, and we have finally made it."
Ptarmigan Resources Ltd. ("Ptarmigan") has mapped four prospects within the Ordovician carbonate platform in the Foreland Basin, and farmed out to Tekoil in January 2007. In addition to the Foreland Basin setting, Ptarmigan has also mapped two prospects in the hanging wall of the regional thrust, and these prospects are comprised of the same Ordovician carbonate reservoir systems. It is within the hanging wall that Glori E-67 will be drilled.
On completion of Glori E-67, Tekoil and Ptarmigan have agreed Tekoil's commitment to earn a 33.3% interest in the offshore license EL #1069 will be fulfilled. The completion of Glori E-67 also meets the commitments set forth by the Canada-Newfoundland & Labrador Offshore Petroleum Board (C-NLOPB) that allows Ptarmigan/Tekoil to extend the license EL #1069 through January 2011.
Final approvals for Glori E-67 are ongoing and are expected to be granted prior to the drilling of the surface hole by the Tek #1 rig. Tekoil is working closely with both the C-NLOPB and the Newfoundland and Labrador Department of Natural Resources (NLDNR) in order to follow all procedures to ensure Glori E-67 is drilled in a safe and efficient manner.
EL 1069 is located on a well-established Ordovician carbonate platform trend that extends along a regional continental passive margin -- stretching from Texas, through Oklahoma, Arkansas, and the Appalachians into New York, and finally into Western Newfoundland. These same reservoirs account for numerous large oil and gas fields in those areas where they have been more thoroughly explored. Newfoundland is an extension of that trend. Only six deep exploratory wells have been drilled in western Newfoundland, the first of which was drilled in 1994, and tested oil from the Ordovician Carbonates at rates exceeding 2,500 barrels/day.
Ptarmigan engaged the reservoir engineering firm of Martin & Brusset Associates, "MBA" (http://www.martinbrusset.com) based in Calgary to provide a risked economic assessment of the mapped prospects. Using a Monte Carlo simulation to statistically model the range of most likely outcomes, MBA identified the key input parameters of acreage, porosity, permeability and assumed net pay, and in modeling the range of possible outcomes, the risked Estimated Ultimate Recovery (EUR) potential of the six combined prospects of Ptarmigan was 67 MMstb (million standard barrels "oil") for the low case, 256 MMstb for the best case (most likely) and 463 MMstb for the high case.
The company said that these are not developed prospects and as an exploratory well, there can be no assurances that Glori E-67 will become a commercial producer or that drilling difficulties won't arise. The area is highly petroliferous and numerous oil seeps occur on the surface and in water wells, and there is also an exposed ancient oil field on the surface at Port au Choix that has been exposed through erosion. Together, these are good indicators of a highly prospective area.
In addition, future activity by Tekoil with respect to its interest in EL 1069 will depend on its ability to finance them.
About Tekoil & Gas Corporation
Houston-based Tekoil & Gas Corporation is a technology-driven company focused on the development, acquisition, stimulation, rehabilitation and asset improvement of small to medium-sized oil and gas fields. The combination of energy fuel reserves and advanced yield technologies are anticipated to generate value for Tekoil and its stakeholders, as the company targets above average growth in the 21st century energy sector. Additional news and information will be made available on the Tekoil website at http://www.tekoil.com and through further press releases.
Forward Looking Statements
This news release may contain certain forward-looking statements, including declarations regarding Tekoil and its subsidiaries' expectations, intentions, strategies and beliefs regarding the future within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements contained herein are based upon information available to Tekoil management as at the date hereof, and actual results may vary based upon future events, both within and without the control of Tekoil management, including risks and uncertainties that could cause actual results to differ materially including, among other things, the impact that acquisitions may have on the company and its capital structure, exploration results, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditure requirements, competition, governmental regulations and other factors, some of which are set forth in Part I, Item 2, of Tekoil's registration statement on Form 10-SB.