By OGJ editors
HOUSTON, July 22 -- Valkyries Petroleum Corp., Vancouver, BC, acquired a 70% interest in the 494,000 acre Lagansky exploration block in the Caspian Sea, began acquiring 424 km of 2D seismic in mid-July, and expects first drilling in second quarter 2006.
The block lies between Valkyries-operated Caspian oil and gas field onshore in Kalmykia and giant Yuri Korchagin oil field and Rakushechnoye gas-condensate field in the Russian Caspian. OAO Lukoil is appraising the two offshore fields.
Lagansky reservoirs are expected to be primarily Aptian sandstones and Upper Jurassic carbonates that are productive on trend.
Valkyries paid $28.5 million to acquire its interest in Lagansky from Mintley Kalmykia Ltd., which purchased the Russian company that held the license since August 2004. Valkyries will fund 100% of the exploration program.
The minimum work program for the 5-year primary term calls for the acquisition of 1,400 km of 2D seismic data, 500 sq km of 3D seismic data, and drilling 4 exploration wells. The standard Russian fiscal terms include a 24% corporate income tax, a petroleum revenue tax, and a duty on exports that is related to domestic and export crude prices.
A $12.5 million bonus will be due to Mintley Kalmykia in the event of a commercial discovery and a further $10 million bonus will be due upon the award of a development license for any resulting discovery.
Funding for the project will be provided by a 9-month, $50 million bridge loan from Ferrier Lullin private bank, a subsidiary of UBS, that will be guaranteed by Lorito Holdings Ltd., an investment company wholly owned by a trust whose settler is Adolf H. Lundin.
