LAS VEGAS, March 26, 2014 /PRNewswire/ - Orofino Gold Corp.
(PINK OTC: ORFG) ("Orofino Gold" or the "Company") is pleased to
announce that the Company's majority owned subsidiary, Nations Oil
& Gas, has made an offer to acquire Alberta Gas Co of
Utah. Financial terms are being
negotiated.
Alberta Gas owns leases for seven stripper wells
located in two separate fields in Utah's Uintah
Basin. Four are located off Highway 40 between Roosevelt and Vernal in the East Gusher Field, and the
remaining three wells are found in the Stirrup Field located on the
Green River south of Vernal. The
Gusher Field leases comprise 680 acres and the Stirrup Field over
200 acres. All of these wells have been producing since at least
the mid-1980s and there are no known environmental issues at any of
the well sites. Alberta Gas has a long-running contract for their
production with Chevron. Most of Alberta's oil has an API gravity of about 32
degrees, with one well at 34.5 degrees. As such there is a slight
discount to Chevron's posted prices.
Three of the Alberta Gas' leases include the
production rights to both the Green River Reservoir and the
generally-deeper Red Cap (formerly known as the Wasatch) Reservoir. The remaining well rights
are limited to the Green River, while Devon Energy currently owns
the Red Cap rights. At the Gusher site, production depths are at
approximately 10,000 feet. In the Stirrup Field, depths range
between 7,200 and 7,500 feet. Other wells are currently being
drilled near Alberta's wells and
these wells are not having to be drilled any deeper than
Alberta's. Production volumes are
solid in these new wells and producers have not had to use any
fracking. The majority of the rig pumping units are 320Ds.
Alberta's leases are termed "held
by production," meaning that as long the production continues, the
leases have indefinite terms. The leases allow for a well to be
placed every 40 acres, so there is space to have an additional 22
wells drilled on the existing lease sites. Production could be
increased on the existing wells where the Red Cap rights are owned,
by drilling the bridge plugs currently in place.
Each of the wells also produces small amounts of
natural gas that Alberta, at one
time, sold to the marketplace. They ceased this practice a number
of years ago as the third party pipeline owners at the time
provided inconsistent service and the price per MCF averaged
$1.00. With current pricing being
around the $4.50 per MCF, new owners
could resume selling the gas. Most of the wells also produce small
amounts of water, which is disposed of at a nearby disposal
facility. Three of the wells make of use of the "backside
gas" produced on-site to power the drilling motors. The other four
wells use electricity to power the operations.
Forward-Looking Statements
These statements are not guarantees of future performance and
involve certain risks and uncertainties that are difficult to
predict. Actual results could vary materially from the description
contained herein due to many risk factors that affect the industry
the Company operates in and other risk factors listed from time to
time in the Company's Securities and Exchange Commission (SEC)
filings under "risk factors" and elsewhere. The forward-looking
statements contained in this press release speak only as of the
date on which they are and the Company does not undertake any
obligation to update any forward-looking statement to reflect
events or circumstances after the date of this press release.
SOURCE Orofino Gold Corp.