By the OGJ Online Staff
HOUSTON, Apr. 18 -- Pinnacle Resources Inc., Englewood, Colo., Wednesday said it secured an option to acquire 100% of Eastern Petroleum (Cyprus) Ltd., a 49% owner of Caspian field on the northwest coast of the Caspian Sea.
Caspian field is in the independent state of Kalmykia, immediately south of Kazakhstan. Caspian field was drilled in the 1960s and produced 950,000 bbl from 12 wells.
London-based Quad Engineering Ltd., a petroleum consultant estimated reserves at 19.7 million bbl.
Glen Gamble, Pinnacle's president, said, "We expect to increase oil production from the Caspian field almost immediately ... We will work over the wells and complete them with good lifting equipment."
The oil will be trucked 40 km to a rail terminal for transport to the Black Sea port of Rostov for export to the world market or sold to the refinery at the port.
Pinnacle has 30 days to advance $300,000 for field operations, for which it will receive 15% of Eastern and the exclusive option to acquire the remaining 85%. Closing is scheduled for June 30.
Pinnacle will advance another $800,000 for field improvements and issue restricted shares of stock equivalent to $3 million based on the price of Pinnacle stock on the date of closing.
Eastern, the operator, will receive 90% of the oil production above 450 b/d until payout of funds invested, and then 49%.
