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Last Post: 11/14/2017 5:01:10 PM - Followers: 0 - Board type: Free - Posts Today: 0

BRITANNICA TO FARM-IN TO THE DAYS CHAPEL OILFIELD Britannica Resources Corp. has signed a letter of intent (LOI) with Anderson County Land Company (ACLC) to earn a 33.3333-per-cent working interest in the Days Chapel enhanced oil recovery (EOR) project located in Anderson county, east Texas, approximately 110 miles southeast of Dallas, Tex. Britannica must expend $1.5-million (U.S.) in exploration expenditures on the project to earn an undivided 33.3333-per-cent working interest subject to a total royalty burden of no more than 20 per cent. Britannica has a further option to acquire up to an additional 17.6667-per-cent working interest (in 1-per-cent increments) of the project. The purchase price shall be based on a National Instrument 51-101-compliant revised independent reserve report and will utilize the value of proven plus probable oil reserves at a 20-per-cent discounted present value, subject to certain maximum prices depending on valuation methodology used. The purchase price can be paid by up to two-thirds in shares of Britannica based on an agreed formula. The LOI is subject to replacement within 60 days by a definitive farm-in agreement and model form operating agreement (AAPL Form 610), encompassing all the terms of the LOI for both parties. Britannica commissioned and has received National Instrument 51-101 F1, F2, F3-compliant filings on the Days Chapel EOR project, prepared by RJ Naas LLC of Plano, Tex., which will be filed with the TSX Venture Exchange and on SEDAR in due course. The transaction is subject to the prior acceptance of the exchange. A finder's fee will be payable, at the election of the finder, in cash, shares or a combination thereof, in accordance with exchange rules and policies. The Days Chapel oil field in Anderson county, east Texas, is shallow Carrizo sand (Eocene formation) at a depth of 550 feet to 700 feet. The formation lacks natural reservoir drive in the form of solution natural gas or water drive. Accordingly, it must be artificially heated to enable the oil to be produced. In March, 2011, ACLC commissioned HJ Gruy & Associates, consulting reservoir engineers, Dallas, Tex., which determined there are approximately 9.1 million barrels of original oil in place (OOIP) on less than 300 acres, applying a 20-foot net pay cut-off. Britannica cautions that the above information is non-NI 51-101 compliant, and therefore should not be relied upon and is being provided solely as an indication of Britannica's exploration target. The Days Chapel oil field is one of a number of contiguous Carrizo oil fields in the southern part of Anderson county. Whereas the Carrizo formation lacks natural reservoir energy in the form of solution natural gas or water drive, in the late 1960s Shell Oil Company developed the Slocum field, less than two miles south of Days Chapel with a full-scale steam-injection using vertical well seven-spot injection patterns. Slocum was Shell's initial steam injection EOR project, in North America, producing over four million barrels of oil. Expertise developed by Shell, at Slocum, was subsequently applied on its Belridge (Kern River) heavy oil field in the San Joaquin valley of California near Bakersfield as well as in its Alberta heavy oil fields. Shell drilled 11 core holes at Days Chapel and these data were used by a successor operating company, Dallas Gas & Electric (DG&E), to map the Days Chapel oil field in the early 1990s. DG&E also drilled a number of core holes to calculate the porosity, permeability and oil saturation of this reservoir as well as one test oil well. The data from these core holes and oil well were applied, together with the Shell core hole data, by DG&E to prepare Upper Carrizo sand net pay Isopach maps for Days Chapel and determine OOIP. DG&E was placed in Chapter 11 bankruptcy by 1993, and as such never pursued development of the project. Characteristics of the Carrizo formation obtained from the core holes and test well are: Oil gravity -- 18 degrees to 20 degrees API; Viscosity -- 800 centipose; Porosity average -- 36 per cent; Permeability -- 1,500 millidarcies; Oil saturation -- 45 per cent. A portion of the proposed exploration program on the Days Chapel project includes a drill coring program and independent laboratory analysis which will provide information to update an NI 51-101-compliant independent reservoir engineering report such that all or a portion of probable reserves can be reclassified as proven undeveloped reserves. Also, Britannica intends to commission a reservoir modelling engineering firm to model the Days Chapel pool using a data set inclusive of the coring program results, that will recommend the best enhanced oil recovery techniques, which may include lateral or horizontal drilling that will maximize the recovery factor and reduce the fully developed and produced cost per barrel. The Days Chapel project has established infrastructures that include paved highways throughout the property, rail access, a sale gas pipeline runs through property, good water sources with rights, valid lease and mineral deeds have been assembled by ACLC over a four-year period. Strategically located close to the Gulf Coast refineries in the Houston ship channel and Beaumont/Lake Charles areas, offers significantly higher oil price differential to Canadian oil producers per barrel.
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