Solimar Energy Limited: Kreyenhagen Project Area Joint Venture Status & Operational Update

• Published in: Marketwire
• Format: Trade Publication Article
• Language: English
• Published: Toronto Intrado Digital Media Canada Inc 25.03.2013

Solimar Energy (TSX VENTURE:SXS)(ASX:SGY) ("The Company" or "Solimar") is pleased to provide the following status update on the Company's joint venture activity in the Kreyenhagen Project area and an operational update on the Company's Kreyenhagen shallow oil field redevelopment project in the San Joaquin Basin, California. The Company signed a Farmout Letter of Intent on March 14th with a well financed Canadian TSXV listed company for an appraisal and development joint venture over a 1,720 acres area encompassing the Kreyenhagen Field and trend acreage (see map below). The initial project phase will consist of the farminee funding the drilling of four wells, the fracking of two wells and the compilation of a reservoir model over the shallow Temblor Sandstone heavy oil reservoir, plus a cash payment to earn 15% working interest (WI) in the heavy oil project area. The second phase will consist of the farminee funding a steam enhanced recovery pilot program and thermal modeling in the project area plus a cash payment to earn an additional 25% working interest (WI) in the heavy oil leases and 7% working interest (WI) interest in the Kreyenhagen Shale oil acreage. Solimar will retain majority ownership and operatorship throughout the program. Further details of the Farmout will be announced after the definitive agreements are signed and completion of Land due diligence, which is expected to take three weeks. The agreements are subject to necessary consents. Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with instability of the economic environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.