The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Sea Dragon acquires producing oil assets with exploration upside in Egypt's Gulf of Suez

Friday, December 07, 2012

Sea Dragon acquires producing oil assets with exploration upside in Egypt's Gulf of Suez09:15 EST Friday, December 07, 2012/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/CALGARY, Dec. 7, 2012 /CNW/ - Sea Dragon Energy Inc. ("Sea Dragon" or the "Company") (TSXV: SDX) is pleased to announce that its wholly owned subsidiary Sea Dragon Energy Holding Ltd. ("Sea Dragon Holding") has completed the acquisition (the "Acquisition") of all of the issued and outstanding shares of National Petroleum Company Shukheir Marine Limited ("NPC SHM"), pursuant to the terms of a share purchase agreement (the "Purchase Agreement") dated December 6, 2012 between Sea Dragon Holding and National Petroleum Company Egypt Limited ("NPC Egypt"), for consideration of US$250,000 cash, paid at closing, plus the  assumption of approximately US$3 million of NPC SHM's working capital deficiency. The consideration will be funded from Sea Dragon's existing working capital and cash flow.The assets of NPC SHM include a 100% participating interest in the Shukheir Marine concession which contains the Shukheir Bay and the Gamma oil fields both of which are located in the shallow offshore Gulf of Suez.  The Shukheir Marine concession currently produces approximately 460 bbls of oil per day.  In addition to the oil and gas assets, NPC SHM owns oil field inventory, which can be applied toward operations and future drilling activity, valued at approximately US$ 4 million.As a result of the Acquisition, NPC SHM is now a wholly owned indirect subsidiary of the Company. It is the Company's intention to further develop the Shukheir Marine concession by pursuing both development and exploration opportunities that have been identified on 3-D seismic and geological mapping of the area.Sea Dragon intends to proceed with the change of name of NPC SHM to Sea Dragon Energy (Shukheir Marine) Ltd. or such other name as the Board of Directors may determine and applicable regulatory authorities approve.Shukheir Bay FieldThe Shukheir Bay Field, which covers a shallow offshore water area of five km2, was originally discovered in 1980 through the drilling of a deviated well, which indicated oil in the Miocene Lower Rudeis sandstones. Subsequently, five additional deviated wells were drilled in the Shukheir Bay field. During the month of October 2012, the Shukheir Bay field produced oil through two wells with a combined daily rate of approximately 410 Bbl/d (34° API). Oil production is delivered to General Petroleum Company's ("GPC") Shukheir gathering station at the western onshore Shukheir area via three 2.2 km/4 inch pipelines for treatment (initial degassing and dewatering). The treated oil is then pumped to GPC's facilities in the Um El Yusr station for further treatment before export.Gamma FieldThe Gamma Field, which covers an area of 23.7 km2 of shallow offshore water was originally discovered in 1987 through the drilling of an exploration well, which tested oil from the Miocene Kareem formation and Cretaceous Nubia sandstones.  Subsequently, eight additional wells were drilled in the Gamma Field.The Gamma Field currently produces 44° API oil from the Miocene Kareem formation sandstone in the GA-1 well.  Average production rates during the month of October 2012 were 50 Bbls/d.  Oil produced from the Gamma Field is transferred to the western onshore Wadi Dara processing facilities for complete treatment through an 8 inch subsea pipeline. It is then shipped to the GPC Shukheir gathering station via a 22 km/6 inch pipeline.  A 17.9 km multi-size pipeline (6 inch/8 inch/10 inch) then transfers the treated oil to the GPC facilities in the Um El Yusr station for further treatment before export.Said Arrata, Chairman and CEO of Sea Dragon commented on the acquisition transaction: "This acquisition provides Sea Dragon with additional production, operatorship and visible growth from several drilling opportunities identified.  The Shukheir Bay field is a mature field with low risk development drilling locations and work over opportunities. In addition, the Gamma field has a large exploration target identified on trend to a well which discovered a significant oil column in the Nubia formation.  With the current production of 950 bopd from the NW Gemsa concession and 250 bopd from the Kom Ombo concession, the Company's total production is now approximately 1,650 bopd. This acquisition is an exciting step forward in our effort toward building a sustainable, full-cycle exploration and development company".About Sea Dragon Energy Inc.Sea Dragon is an international exploration and development company with a focus on the Middle East and offices in Cairo, Paris and Calgary. For further information please see the website of the Company at www.seadragonenergy.com or the Company's filed documents at www.sedar.com.This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States, in any province or territory of Canada or in any other jurisdiction. NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THE RELEASE.SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATIONThis press release contains certain statements or disclosures relating to Sea Dragon that are based on the expectations of Sea Dragon as well as assumptions made by and information currently available to Sea Dragon which may constitute forward-looking information under applicable securities laws.  All such statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that Sea Dragon anticipates or expects may, or will occur in the future (in whole or in part) should be considered forward-looking information.  In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro-forma", or other comparable terminology. In particular, this press release makes reference to the anticipated benefits of the Acquisition and expected production from the properties to be acquired pursuant to the Acquisition. Many factors could cause the performance or achievement by Sea Dragon to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include changes to economic conditions. Readers are cautioned that the foregoing list of factors is not exhaustive.  The forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The Company is not under any duty to update any of the forward-looking statements after the date of this press release or to conform such statements to actual results or to changes in the Company's expectations and the Company disclaims any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.SOURCE: Sea Dragon Energy Inc.For further information: Said Arrata Chairman, CEO and Director (403) 457-5035    Tony Anton President, COO and Director  (403) 457-5035    Olivier Serra CFO and Director +331 5343 9442