Sea Dragon acquires producing oil assets with exploration upside in
Egypt's Gulf of Suez
/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 Field
The 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 Field
The 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
INFORMATION
This 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.