Sawn Lake Project, Alberta, Canada
Surge subsidiary Signet Energy Inc., formerly known as Surge Global Energy (Canada) Ltd., located in Calgary, Alberta, Canada, operating under a farmout agreement it entered on February 25, 2005 with Deep Well Oil & Gas Inc. and Northern Alberta Oil Ltd., is currently the operator of the Sawn Lake Oil Sands Development in Alberta, Canada. The Sawn Lake Oil Sands Development has been estimated by two respected third-party petroleum engineering firms to contain a total of 820 million to 1.2 billion barrels of oil resource in place of which Signet Energy has a 40% working interest. The development consists of 69.5 contiguous sections covering 44,480 acres in the Sawn Lake area of Alberta, Canada.
Key Milestones in the Sawn Lake Oil Sands Development:
Surge announces intent to acquire 40% working interest in Sawn Lake (10 February 2005)
Received approval to drill first horizontal production well at Sawn Lake (19 October 2005)
Spudded first well at Sawn Lake (25 September 2005)
Drilled and cased the first horizontal well at Sawn Lake (6 December 2005)
Surge’s subsidiary, Signet, operator of Sawn Lake project, completes round of financing, which will help advance the drilling program (28 December 2005)
Began testing production on first well at Sawn Lake (January 2005)
Kitty Area, Keg River Formation, North Central Alberta, Canada
Surge entered into a farmout agreement with Kelso Energy (TXS-V: KEL) for oil and gas exploration of two and a half sections in the Keg River Formation, also known as the ‘Granite Wash,’ in the Kitty area of North Central Alberta, Canada on March 6, 2006.
Volumetric calculations of the farmout lands show potential original light oil in place of approximately five million barrels with large recovery factors expected to be in excess of 25 percent, as is the norm for this field. Upon the completion of its farmee commitments, Surge will earn from 60 to 100 percent working interest in oil and gas produced from the farmout lands.
High Quality Characteristics of Keg River sandstones:
Sands occur at a depth of about 1500 M. (4900 feet)
Net porous sands from 2 to over 8 meters
Porosity 15-25 percent, typically 18 percent
Horizontal permeability 500 to occasionally over 10,000 millidarcies
Net sweet oil pay 2 to 6 meters
Deliverability generally about 200 STBOPD and occasionally to over 600 STBOPD
API gravity - 40 degrees
GOR 200 ft3/barrel (gas oil ratio ~200 cubic feet per barrel)
All existing pools are Good Production Practice and not subjected to production rate limits
Santa Rosa Dome Project, Mendoza Province, Argentina
Surge holds a 17.52% working interest in the Santa Rosa Dome project in the Mendoza province of Argentina. Surge along with its joint operating partners, Oromin Explorations Ltd. (“Oromin”) and Ottoman Energy Ltd. (“Ottoman”), anticipate the exploration work to include the drilling of up to three exploration wells to around 1,250 meters each. The Santa Rosa Project is a 7,694 square kilometer exploration block located in the eastern part of the prolific Cuyana Basin in Argentina’s Mendoza Province. The Cuyana Basin has already produced about 970 million barrels of oil from fields located in the western half of the basin. The eastern part of the basin is under-explored due to the presumed absence of structures capable of trapping significant hydrocarbons. The Santa Rosa concession, however, contains a domal structure of over 220 square kilometers that may lie on a likely hydrocarbon migration fairway. The dome has not been yet been tested by drilling. Seismic work carried out by Oromin indicates the likely presence of reservoir quality rocks over the structure with a regional seal covering the entire area.
The exploration work comprises some further seismic modeling and the drilling of two or three wells on or near the crest of the dome. Oromin and Ottoman anticipate that the drilling program will take place towards the end of 2006, depending on the timing of the final award of the concession and on rig availability. Oromin currently owns 82.48% of the concession and Surge Global Energy Inc. holds a 17.52% working interest in the project.
December 1, 2006 - 9:25 AM EST
Surge Announces the Acquisition of a Private Oil Sands Company
SAN DIEGO, Dec. 1, 2006 (PRIME NEWSWIRE) -- Surge Global Energy, Inc. ("Surge") (OTCBB:SRGG) announced today that it has entered into a stock purchase agreement ("Agreement") for the acquisition ("Acquisition") of a privately owned oils sands company located in Alberta, Canada ("Oil Sands Company"). Under the terms of the Agreement, the shareholders of the Oil Sands Company will receive CDN$6,350,000 and 8,965,390 shares of preferred stock ("Exchangeable Shares") of Cold Flow Energy, ULC ("Cold Flow") valued at CDN$10,000,000. Cold Flow is a wholly-owned subsidiary of Surge. The rights, privileges and restrictions governing the Exchangeable Shares will provide that each whole Exchangeable Share may be exchanged for two shares of Surge common stock for a period of 5 years following the closing. The initial closing date is anticipated to be January 18, 2007.
The Oil Sands Company owns an undivided 30% working interest in 135 square miles, 86,400 acres (Net 40.5 sections or 25,920 acres) in the Red Earth area of Alberta which is comprised of Oil Sands Leases within Townships 87, 88 and 89, Ranges 7, 8, 9, 10 and 11 W5M (the "Properties").
David Perez, CEO and Chairman of Surge stated, "This is a very significant acquisition for Surge. The oil sands development project consists of 4 major contiguous blocks located in close proximity to existing services and infrastructure. A respected independent third party engineering firm has estimated Original Crude Bitumen in place to be up to 2.0 billion barrels. Under the Oil Sands Company's 30% working interest, this would amount to an expected 600 million barrels of Original Crude Bitumen in place."
Using an Enhanced Oil Recovery ("EOR") program like Cyclical Steam or other EOR thermal process, the properties could potentially yield between 180 and 300 million barrels net recoverable to Cold Flow at recovery factors ranging from 30% up to 50% of Original Crude Bitumen in place.
Details of the Acquisition will be included in Surge's 8-K to be filed with the Securities Exchange Commission.
About the Canadian Oil Sands
Alberta's oil sands contain the biggest known reserve of oil in the world. According to the Alberta Energy and Utilities Board (EUB) (http://www.eub.ca),
an estimated 1.7 to 2.5 trillion barrels of oil are trapped in a complex mixture of sand, water and clay. 2005 EUB 'Reserves Report' indicates that last year, Alberta's bitumen production totaled 388 million barrels. Going forward, the EUB expects Alberta's bitumen production to increase to more than one billion barrels per year by 2015. Total raw bitumen production - the petroleum product directly obtained from oil sands - exceeded total conventional crude oil production in the Province for the first time during 2001. In 2005, Alberta oil sands production has been approximately equal to Alberta's light and heavy conventional crude production.
About Surge Global Energy, Inc.
Surge Global Energy, Inc., located in San Diego, California is focusing exclusively on opportunities in the Canadian Heavy Oil Sands. Exploitation Opportunity Surge is the largest shareholder of Signet Energy, Inc., the operator of the Sawn Lake Oil Sands project. For more information on the company please visit http://www.SurgeGlobalEnergy.com
The Surge Global Energy, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2471
CONTACT: Surge Global Energy, Inc.
William Greene, Chief Financial Officer
(858) 704-5009 (Direct)
Fax: (858) 704-5011
Sheila Rockwell, Controller
(858) 704-5012 (Direct)
Fax: (858) 704-5013