Vancouver, British Columbia--(Newsfile Corp. - June 2, 2016) - Taipan Resources Inc. (TSXV: TPN) ("Taipan" or the "Company") is pleased to announce that it has closed its acquisition of a twenty five percent (25%) working interest in in fifty seven (57) oil and gas leases covering 7,314 acres located in the bifurcated Texas Panhandle (the "Transaction").
Taipan purchased its 25% working interest from Ponderosa Energy, LLC ("Ponderosa") for the sum of US$500,000. In addition, Taipan has undertaken to pay Ponderosa's seventy five percent (75%) working interest share of approved costs incurred in compliance with the terms of the joint operating agreement ("JOA") that governs the relationship between the Company and Ponderosa in respect of the Leases, subject to a total cap of US$750,000. The Transaction is an arm's length transaction and no finder's fee is payable in connection with the Transaction.
Mr. Joel Dumaresq, CEO, comments "closing this transaction is an important step in securing Taipan's future as a profitable, oil producer. Our timing in securing this deal with Ponderosa earlier this year, was very fortuitous in that oil prices have since risen dramatically. As Ponderosa reworks existing well bores and raises production in the coming months, we plan to employ cash flows towards securing additional assets."
Ponderosa is a Dallas based oil and gas company strategically focused on the acquisition and development of conventional oil & gas field redevelopment. Ponderosa has identified and aggregated oil assets which exhibit long economic life, shallow decline rates, and low capital investment requirements. The Company's intent is to consolidate large asset blocks in the bifurcated Texas Panhandle and produce economically in anticipation of an increase of energy prices. The Company has a 25% working interest in 156 wellbores, of which 52 are currently producing.
Ponderosa has commenced optimization operations on non-producing but existing wellbores. It will not be undertaking exploration risk or developing new wells until prices recover to levels where it would be attractive to do so. The Company will perform recompletions on the wells to place them back into production. The Company plans to bring 10-15 additional wells online each month, depending on the time and state of each wellbore downhole, ultimately ending up with 500+ wellbores in the target areas over the next 6 months.
The Texas Panhandle Field is a giant, mature oil and gas field located in Northern Texas. The field has been in production since its discovery in 1910 and by 1994 has produced over 1.42 billion barrels and over 8.1 trillion cubic feet of natural gas. The Panhandle Field is littered with thousands of idle wellbores which have been shut-in or neglected due to the current commodity price environment. Numerous operators have been deeply affected by the recent oil rout. Due to overleverage and costly corporate overhead, many of those affected will be forced to liquidate their assets in the area. Ponderosa is poised to take advantage of this scenario by selectively acquiring assets and leasing areas where prices have been deeply discounted.
The Company also reports the issuance of 700,000 stock options to Officers and Directors of the Company and 125,000 stock options to Consultants of the Company. The options were issued with a strike price of $0.10 per share with a 4 year term to expiry. The Options were granted pursuant to the Company's stock option plan and are subject to regulatory approval.
Taipan Resources Inc. is in the business of consolidating producing oil and gas asset blocks in stablehydro carbon producing regions. Through its wholly-owned subsidiary "Lion Petroleum Corp.", Taipan alsohas a 20% non-operated interest in Block 1 and a 100% operated-interest in Block 2B onshore.
CEO and Director
Taipan Resources Inc.
(604) 336 3193
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Cautionary Notes Regarding Forward Looking Statements
This News Release contains forward-looking statements. Forward-looking statements are statements that relate to future events. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our industry, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.