Avalon Oil & Gas, Inc. Signs LOI to Purchase Oil Property
MINNEAPOLIS--(BUSINESS WIRE)--April 6, 2006--
Avalon Oil & Gas, Inc., (OTCBB: AOGS) announced today that it has signed a Letter of Intent to acquire a fifty percent (50%) working interest, in a 266.73-acre oil and gas lease in Starr County, Texas, from Canyon Creek Oil and Gas, Inc. The 266.73 acre property has four shut-in oil and gas wells.
The lease is located in the Boyle Field, an oil field that has produced over 1,259,000 barrels of oil. Avalon Oil & Gas conservatively estimates the remaining reserves total over 1,283,000 barrels of oil and 242,900 mcfg.
Avalon and Canyon Creek will hire an engineering firm to oversee the implementation of a water flood project to recover the maximum amount of oil from the reservoir. Once the water flood procedure is fully operational, the Company projects monthly cash flow, assuming prices of $60.00/barrel of oil and $6.50/mcfg, at nearly $500,000, after deducting for lease royalties, operating expenses and taxes.
The Company intends to drill and complete ten additional wells during the next twelve months to further develop the oil reserves. Oil production is projected to reach 1,000 barrels of oil per day when the lease is fully developed.
Canyon Creek Oil and Gas, Inc., is a subsidiary of Universal Property Development and Acquisition Corporation (OTCBB: UPDA). UPDA is a publicly funded oil & gas company that targets projects with high net revenue interests, where risk has been substantially reduced by meticulous technical evaluation and geophysics.
Avalon Oil & Gas, Inc. is an oil and gas company engaged in the acquisition of oil and gas producing properties with multiple enhancement opportunities.
Forward-looking statements in the release are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are subject to certain risks, and uncertainties and actual results could differ from those discussed. This is material information only and is not an offer or solicitation to buy or sell the securities.
Source: Avalon Oil & Gas, Inc.
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