NEW YORK--(BUSINESS WIRE)--Octagon 88 Resources Inc (OTCBB:OCTX) and CEC North Star Energy Ltd are pleased to announce the AGAT laboratories results on the successful Elkton Erosional Edge well cores. The Elkton Erosional edge core results show an oil API of 14.49, almost 50% higher than industry average needed for primary production. These results confirm the Company has a dynamic geological game changing event.
of the Results
“Excellent cap rock with oil and gas traces present in all the cores taken after entering the zone. Gas traces 2-4 times higher than those found in the previously announced Bluesky/Gething well. Overall 20 meters of oil bearing sands and carbonate were identified. Visual observations of the cores showed, high oil saturation, some portions highly fractured, and over 25 percent consisting of unconsolidated material. No water shows were found. 3rd party Lab reports showed oil API of 14.49 and Viscosity of 9,335 cp at reservoir conditions. Logs of porosity showed zones approaching 30 percent. The erosional edge model or “sweet spot” has been confirmed with only permeability results to follow. The quality of the oil is much better than expected and well in the range of primary recovery in typical reservoir conditions. Two successful coring operations have been completed on schedule and confirming geophysical and geological modeling was very accurate.”
-CEC North Star Technical Team
Schlumberger has been engaged by CEC North Star Ltd. to provide dynamic reservoir simulations for both the Bluesky and Elkton projects, to determine preferred methods (technical) for production of reservoirs. Simulations would include both primary and thermal recovery technics in vertical and horizontal wellbores (and horizontal well pairs). These results will be available in Q2 of 2013 and provide the ultimate recovery rates in the range being reported by neighbouring developments of 40 to 70 percent.
This will cause a revaluation methodology change on the Company’s assets, for new third party engineering reports, to recoverable barrels and accordingly economics of the projects.
The presence of primary production abilities in both projects is a major advantage to the Company, in that the average typical thermal projects would have longer timelines due to engineering analysis and applications to the ERCB for licensing pilot production plants. This will be occurring for future planned secondary production but with the advantage the Company has now established of being, and thus able to immediately start planning for licensing and drilling primary productions wells in 2013.
These first two projects combined will target scaled development possibilities of 50,000 barrels per day of conventional heavy oil production beginning this year.
In 2012 / 2013 Octagon 88 Resources, Inc. acquired substantial light and conventional heavy oil assets in Northern Alberta. The acquired projects have been substantially de-risked which leads the company to emerge as a development stage oil and gas company as of January 22, 2013. The company’s intention is to grow shareholder value through mergers and acquisitions opportunities available to the company. Octagon 88 Resources is the largest publicly trading shareholder of CEC North Star Ltd. with a 33% ownership.
The current program schedule entails working with the operator of these properties to bring on production and cash flow through the company’s direct working interests, and indirect investments spread throughout the projects.
CEC North Star Energy Ltd is a non-public Calgary based Energy Corporation with a substantial oilsands lease holding in the Peace River block of north western Alberta Canada.
CEC North Star has acquired sixty-seven (67) sections respectively 39,040 acres of leaseholds with a prospective resource of 873 MM bbl (Best Estimate) PIIP in the Elkton Debolt formations based on a 25 section independent analysis. The same independent petroleum engineering firm conducted a feasibility study 139 Mil (NPV @ 10% fully risked) based on a typical four sections development of the Elkton/Debolt. In addition the property is prospective for Bluesky/Gething oil sands formations which may lead to early primary production development similar to other projects in the Peace River Block offering significant production potential.
CEC North Star has entered into joint venture on adjoining properties consisting of 23 sections or 14,720 acres which may increase PIIP (Petroleum Initially in Place) to in excess of three (3) billion barrels.
CEC North Star goals of ultimately 200,000 bbl/d of bitumen from these lands and objectives are to create value by developing these oilsands properties using scalable project development targeting multiple 5-10,000 bbl/d facilities with stakeholder involvement at every stage – Environment, Occupational Health and Safety are of paramount concern. Use of known technologies while remaining flexible to adopt new processes to maximize recovery of oil in place while reducing operating costs and a relatively quick schedule and lower capital costs compared to other oilsand projects resulting in maximum return on capital invested and quicker shareholder returns
This press release contains forward-looking statements concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Forward looking statements in this press release include statements about our drilling development program. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the timing and results of our 2013 drilling and development plan. Additional factors include increased expenses or unanticipated difficulties in drilling wells, actual production being less than our development tests, changes in the Company's business; competitive factors in the market(s) in which the Company operates; risks associated with oil and gas operations in the United States; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission including the Company's Annual Report on Form 10-K for the year ended December 31, 2012 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2012. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Cautionary Note to U.S. Investors -- The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as "probable," "possible," "recoverable" or "potential" reserves among others, that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our filings with the SEC.