Britannica Completes Definitive Agreement For Days Chapel
VANCOUVER, BRITISH COLUMBIA, Feb 12, 2013 (Menafn - MARKETWIRE via COMTEX) --Britannica Resources Corp. (The "Company") ispleased to announce on February 6, 2013, executed a definitiveFarm-In Agreement & Model Form Operating Agreement (A.A.P.L. Form610) with Anderson County Land Company ("ACLC") previously announcedon January 3, 2013, to earn a 33.3333% working interest in the DaysChapel Enhanced Oil Recovery ("EOR") Project ("Days Chapel" or the"Project"), located in Anderson County, east Texas approx. 110 milessoutheast of Dallas, Texas.
Britannica received TSX Venture Exchange (the "Exchange") approval onthe transaction January 25, 2013. A finder's fee of 450,000 shareswill be issuable to Rex Obermann in stages, in accordance withExchange rules and policies.
Britannica must expend US1,500,000 in exploration expenditures onthe Project to earn an undivided 33.3333% working interest subject toa total royalty burden of no more than 20%. Britannica has a furtheroption to acquire up to an additional 17.6667% working interest (in1% increments) of the Project. The purchase price shall be based on aNational Instrument 51-101 compliant revised independent ReserveReport and will utilize the value of Proven plus Probable oilreserves at a 20% discounted present value, subject to certainmaximum prices depending on valuation methodology used. The purchaseprice can be paid by up to 2/3rd in shares of Britannica with theremainder in cash based on an agreed formula.
The first phase of the exploration program on the Days Chapel Projectis expected to begin shortly, it will include a Drill Coring Program,independent laboratory analysis and geological review. The resultsfrom the Drill Coring Program will provide information to update a NI51-101 compliant independent reservoir engineering report such thatall or a portion of Probable Reserves can be reclassified as ProvenUndeveloped Reserves. Also, Britannica intends to commission aReservoir Modeling engineering firm to model the Days Chapel poolusing a data set inclusive of the Coring Program results, that willrecommend the best enhanced oil recovery techniques, which mayinclude lateral or horizontal drilling that will maximize therecovery factor and reduce the fully developed and produced cost perbarrel.
The Days Chapel oilfield in Anderson County, East Texas is shallowCarrizo sand (Eocene Formation) at a depth of 550 feet to 700 feet.The formation lacks natural reservoir "drive" in the form of solutionnatural gas or water drive. Accordingly, it must be artificiallyheated to enable the oil to be produced. The Days Chapel oilfield isone of a number of contiguous Carrizo oilfields in the southern partof Anderson County. Whereas the Carrizo formation lacks naturalreservoir energy in the form of solution natural gas or water drive,in the late 1960's Shell Oil Company developed the Slocum field, lessthan two miles south of Days Chapel with a full scale steam-injectionusing vertical well 7-spot injection patterns. Slocum was Shell'sinitial steam injection EOR project, in North America, producing over4 million barrels of oil. Expertise developed by Shell, at Slocum,was subsequently applied on its Belridge (Kern River) heavy oilfieldin the San Joaquin Valley of California near Bakersfield as well asin its Alberta heavy oil fields.
Shell drilled 11 core holes at Days Chapel and this data was used bya successor operating company, Dallas Gas & Electric ("DG&E"), to mapthe Days Chapel oilfield in the early 1990's. DG&E also drilled anumber of core holes to calculate the porosity, permeability, and oilsaturation of this reservoir as well as one test oil well. The datafrom these core holes and oil well was applied, together with theShell core hole data, by DG&E to prepare Upper Carrizo Sand Net PayIsopach maps for Days Chapel and determine OOIP. DG&E was placed inChapter 11 bankruptcy by 1993, and as such never pursued developmentof the Project.
Characteristics of the Carrizo formation obtained from the core holesand test well are:
--Oil gravity - 18 degrees to 20 degrees API;
--Viscosity - 800centipose;
--Porosity - Average of 36%;
--Permeability - 1,500 Millidarcies, and
--Oil saturation - 45%.
The Days Chapel Project has established infrastructures that includepaved highways throughout the property, rail access, a sale gaspipeline runs through property, good water sources with rights, validlease and Mineral Deeds have been assembled by ACLC over a 4-yearperiod. The Project is strategically located close to the Gulf CoastRefineries in the Houston Ship Channel and Beaumont/Lake Charlesareas. The price differential has ranged between 20.00 and 30.00per barrel higher in January 2013 as compared to what Canadian oilproducers received.
ON BEHALF OF THE BOARD
Jeffrey Cocks, President
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 this release.
Britannica Resources Corp.
(888) 909-1033 (FAX)
SOURCE: Britannica Resources Corp.
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