GeoPetro Resources Company Acquires Interest in New Block in Indonesia
GeoPetro Resources Company (“GeoPetro” or the “Company”) (AMEX: GPR) (TSX: GEP) today announced that it has acquired an interest in a new production sharing contract (“PSC”) in Indonesia.
Pursuant to a joint bid agreement (“JBA”) with Adelphi Energy Limited and Continental Energy Corporation, the group’s joint venture company, ACG (South Bengara-II) Pte. Ltd. (“ACG”), signed a new PSC for the South Bengara-II block. GeoPetro’s wholly owned subsidiary, GeoPetro Resources (South Bengara-II) Pte. Ltd., owns a 24.999% stake in ACG and its new PSC.
The South Bengara-II PSC was one of 22 new PSC’s signed by the Minister of Mines and Energy at a ceremony in Jakarta yesterday. The award is a result of ACG’s winning bid submitted in the August 2008 competitive bidding round held by the Indonesian ministry of oil and gas.
ACG, in accordance with the terms of its bid and the PSC, is obliged to pay a signing bonus of $1,000,000 and complete a work program during the first 3 PSC contract years which includes conducting geological and geophysical field surveys and studies, acquiring at least 100 line kilometers of new 2D seismic, and drilling one exploration well for a total minimum expenditure of $7,850,000.
In accordance with the provisions of the JBA, GeoPetro will pay 50% of the signing bonus and 50% of the first $3,000,000 in work program expenditures. Thereafter it will pay its 24.999% equity share of costs and be entitled to the same share of revenues.
Exploration activities in the South Bengara-II Block are expected to commence with geological field surveys in 2009.
The South Bengara-II Block encompasses an area of 5,257 square kilometers or over 1,300,000 acres and lies onshore on the northeast coast of the island of Borneo in the Indonesian province of East Kalimantan. The Block contains an existing gas accumulation, several oil and gas seeps, and large prospects and leads. It also lies adjacent to and immediately south of the Bengara-II Block in which GeoPetro owns a 12% interest and in which a 2007 drilling program revealed encouraging results.
Stuart J. Doshi, GeoPetro’s President and CEO, remarked “we are delighted to have signed this PSC with the Government of the Republic of Indonesia and we look forward to working closely with our new partners. We have been involved in exploration in the vicinity of South Bengara-II Block since 2000 and have accumulated extensive knowledge of the petroleum geology in this highly prospective area which we believe can translate into significant commercial discoveries.”
GeoPetro is an independent oil and natural gas company headquartered in San Francisco, California. GeoPetro currently has projects in the United States, Canada and Indonesia. GeoPetro has developed a producing property in its Madisonville Project in Texas. Elsewhere, GeoPetro has assembled a geographically diversified portfolio of exploratory and appraisal prospects.
This news release contains forward-looking information. Statements contained in this news release relating to future results, events and expectations are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may involve known and unknown risks involving market prices for natural gas and oil, economic and competitive conditions, regulatory changes, estimates of proved and probable reserves, geological and engineering uncertainties, potential failure to achieve production from development drilling projects, capital expenditures and other risks and uncertainties, which may cause the actual results to be materially different from those expressed or implied by such statements. Additional risk factors include, among others, those described in the Company’s Annual Report on Form 10-K on file with the U.S. Securities and Exchange Commission. We do not have any intention or obligation to update forward-looking statements included in this press release after the date of this press release, except as required by law.
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