Georox Resources Inc. - Coteau Lake, Saskatchewan update - drilling of second well commences - new credit facility with chartered bank
Wednesday, Nov 28, 2012KELOWNA, BC, Nov. 27, 2012 /CNW/ - Georox Resources Inc. ("Georox" or the "Corporation") (GXR:TSX-V; OF6A:FRA) is pleased to announce that a second horizontal well on its Coteau Lake, southeastern Saskatchewan prospect has spudded on November 23rd. Georox will pay 42.5% of the costs to earn 31.875% Working interest BPO and a 21.25% working interest APO. The contract depth for this well is approximately 1,975 m and the estimated cost to Georox to drill, complete and test is approximately $839,000.
Drilling this well follows the completion of the review of the original 3D
seismic after analyzing the results of the first horizontal well 8-10 on this
prospect. Five additional well locations have been identified on a preliminary basis. The next well is anticipated to be drilled before March 31st, 2013. Georox has 3,040 gross (682 net) acres of oil and gas mineral rights in the light-medium Mississippian oil Coteau Lake prospect.
Burkhard, Franz, Georox President, expressed satisfaction that the development of the Coteau Lake project will expand. Mr. Franz stated "We believe this is a great opportunity to drill and participate in a highly prospective, light/medium oil exploration play and develop a new core area for the Corporation".
On July 16th, 2012 Georox announced that the initial 8-10 Coteau Lake well (31.875% BPO, 21.25% APO) was completed and swab tested at an average rate of approximately 435 bopd of light oil and 30 bpd of water over a 7.5 hour period.
The well has been equipped and formally tested and production rates have been limited to approximately 60 bopd due to high water cut of 60%. The Production is expected to remain at this level until the water disposal application is approved by the Energy Resources Conservation Board. After the water disposal well is activated it is planned to implement high volume lift production on the 8-10 well.
The Corporation has entered into an agreement for a credit facility with a Canadian chartered bank, secured against the Corporation's assets. The credit agreement provides for a $1.0 million dollar demand operating facility and a $500,000 demand acquisition facility, subject to the bank's prior review of the proposed acquisition prior to use. Georox currently expects to make use of its bank facility for further development of its existing properties.
Source: Georox Resources Inc.
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