14th Oct 2005 07:00
Cambrian Oil & Gas PLC14 October 2005 14 October 2005 Cambrian Oil & Gas Plc ("COIL" or "the Company") Acquisition of an interest in Elko Energy Inc. Cambrian Oil and Gas Plc (AIM : COIL) today announces that it has acquired aninterest in Elko Energy Inc. ("Elko"), a private Canadian oil and gasexploration company that is pursuing petroleum exploration opportunities inEurope and other locations. On 6 October 2005 Elko was granted a 5,000 sq kmoffshore exploration licence in the Danish North Sea and it plans to bid forother acreage in the same region. Key Points: • 2,500,000 Special Warrants purchased at 20 Canadian cents per warrant for a total cash consideration of CAN$500,000; each warrant is convertible to one share at no additional cost; • Cambrian Mining ("CBM"), which holds an approximate 27% interest in COIL, has also acquired 15,000,000 Special Warrants to support COIL as a co-investor; • Following the subscriptions by COIL and CBM, Elko will have approximately C$7.5 million in cash; in addition, Elko has stated it intends to seek a listing on a public stock exchange in 2006; and • COIL and CBM will hold a combined total interest of circa 32% in Elko and they expect to nominate one Director to the Board, through whom they will be able to participate in the decision making process in the period prior to Elko's listing in 2006. Neale Taylor, Chief Executive Officer of COIL, said: "Our investment provides anattractive entry price to an exciting exploration program with the potentialquickly to gather significant value. We like Elko's people as well as theirprojects. With our Board level involvement and Elko's intention to seek apublic listing, both companies will have flexibility in the future developmentof the relationship." Rudolf Kleiber, President and CEO of Elko Energy Inc. acknowledged: "We are verypleased to have reached this agreement with Cambrian Oil & Gas and Cambrian.The excellent reputation of Cambrian Mining in the financial sector combinedwith Elko's various oil and gas projects offers the potential for very rapidgrowth. " John Byrne, CEO of Cambrian, said: "Cambrian is pleased to support Cambrian Oil& Gas by making a substantial investment in Elko Energy, which offers exposureto exciting oil and gas prospects in Europe." Ends For Further Information please contact: Cambrian Oil & Gas Neale Taylor, CEO +44 (0) 20 7409 0890 Paul Mc Groary, Director + 44 (0) 79 3056 8160 Parkgreen Communications Justine Howarth +44 (0) 20 7493 3713 Notes to editors: About Cambrian Oil & Gas: Cambrian Oil & Gas (AIM : COIL), previously Silvermines Media Plc (AIM : SLV) acompany first admitted to trading on AIM on 15 July 2004, was readmitted to AIMon 1 March 2005 following an acquisition of the entire issued share capital ofZhibek Resources Plc. Zhibek was formed in February 2004 for the purpose ofconducting oil exploration, development and production activities in CentralAsia and FSU. COIL currently has three operational projects in the Kyrgyz Republic; theBeshkent-Togap water injection project; the Tash Kumyr exploration project, anexploration licence area with 5 prospects and a recently acquired intermountainbasin exploration licence area, which adjoins Lake Toktogul. Drilling at Tash Kumyr is expected to begin in 2006, following completion of the2D seismic program which began on 20 September 2005. The Beshkent-Togap Oil Field is located in the south-western region of theKyrgyz Republic. The field is approximately 14 kilometres long and twokilometres wide. It is situated approximately 300 kilometres west of the Kyrgyzoil refinery at Jalal Abad and approximately 200 kilometres southwest of theUzbekistan oil refinery in the city of Fergana. The Beshkent-Togap oil field currently has in excess of 70 producing wells withan estimated 65-76 million barrels (MB) of oil in place. To date, only 4.1 MBof oil has been produced on the field. COIL holds a 50% equity interest in theuplift in production from the previous level, prior to the water injectionproject, and after recovery of its capital outlay via an initial 70% share.There is the potential to achieve upside incremental oil recovery of 6MB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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