Wednesday February 13, 12:55 pm ET
-- Acquisition of 25% working interest in the North Semitropic Prospect, California
-- Multiple target zones have potential gross reserves of 32 MMBO and 19 BCFG-- Farm-in agreement with Transco Oil & Gas, Inc. (Operators)
-- Drilling scheduled for Q2 2008
HOUSTON--(BUSINESS WIRE)--PetroSouth Energy Corp. (the ?Company?) (OTC BB: PSEG.OB), a Houston-based energy exploration and production company focused on high-impact energy prospects, is pleased to announce that it will participate in the North Semitropic Prospect, located in Kern County, California, following a farm-in agreement with operator/explorer Transco Oil & Gas, Inc.
Prospect Description
The North Semitropic Prospect is +/- 2,390 acres encompassing three (3) target horizons to +/- 16,500 feet. The primary target is 13,700 feet, FJ/Vedder Sands (Miocene ? Oligocene) with secondary targets of 10,000 feet Fractured Monterey Shale, (Upper Miocene) and 16,500 feet E-Sand (Eocene) zones will be drilled to approximately 10,000ft, 14,000ft, and 16,500ft.
An independent expert has estimated the three main targets to be explored have potential gross reserves of 32 MMBO (million barrels oil) and 19 BCFG (billion cubic feet of gas).
The North Semitropic Prospect is located on the prolific Rio Bravo-Greeley trend in northern Kern County. This trend extends some 30 miles in a northwest to southeast direction across the valley. The trend continues to be woefully under explored. Research has shown that in an eight-township area surrounding this play, that only one well per township has reached the Eocene sand, the deepest objective of this play. The potential for oil & gas accumulation has been developed through the use of both seismic and sub-surface geological disciplines.
The first test well has a target depth of 14,000 feet. This will allow testing of two (2) targets, the primary objective, the FJ/Vedder Sand at +/- 13,700 feet and?the back out zone, the?fractured Monterey Shale at +/- 10,000 feet. The discovery well in the Wasco Field was drilled in 1937 and flowed oil as high as 3,600 barrels per day. The Vedder Sand yielded over 5 million barrels of 38 gravity oil and 3 billion cubic feet of gas at the old Wasco Field.
The North Semitropic prospect is situated on trend to recently completed wells. Nearby, the North Shafter Field wells in this trend have reported initial production rates of 700-800 barrels of oil per day or more. Some of these horizontal Fractured Monterey Shale wells in the North Shafter field have already recovered 300,000 to 500,000 + per well and are still producing.
The final target at about 16,500 ft. has a seismically defined structure. This target has been penetrated in the old Wasco field by a well drilled in 1940 to the Vedder sand and deepened in 1949 to the Eocene sand which produced over 275,000 barrels of 40 gravity and over 1 BCFG from the Eocene before being shut in.
Nearby Producing Fields
Several fields in close proximity to the North Semitropic Prospect are active oil producers. Fields along the trend include Westhaven, Tulare Lake, Wasco, Shafter and Rio Bravo-Greeley. Several hundred (100) million barrels of oil have been produced from these fields.
The San Joaquin Basin
The San Joaquin Basin is located in Kern County, California. As of 2003, using geology-based assessment methodology the USGS estimated means of 1.7 trillion cubic feet of gas (TCFG), 393 million barrels of oil (MMBO), and 86 million barrels of total natural gas liquids (MMBNGL) for the five total petroleum systems (exclusive of reserve growth in existing oil and gas fields). Well over half of both the mean undiscovered gas resource (62 percent, 1 TCFG) and the mean NGL resource (67 percent, or 57 MMBNGL) is in the Deep Fractured Pre-Monterey Assessment Unit of the Eocene-Miocene Composite Total Petroleum System (table 1). Of the mean 393 MMB of total undiscovered oil, about 328 MMBO (83 percent) is estimated to be in five assessment units of the Miocene Total Petroleum System, and 46 MMBO (12 percent) is estimated for the Eocene West Side Fold Belt Assessment Unit of the Eocene Composite Total Petroleum System (table 1). Nearly 31 percent, or 121 MMB, of the total mean undiscovered oil resource in the San Joaquin Basin Province is estimated to be in the Central Basin Monterey Diagenetic Traps Assessment Unit.
Potential reserve growth in existing oil and gas fields in the San Joaquin Basin Province was calculated during our study. Based on the analyses of recovery efficiencies and remaining oil-in-place, we estimated that another 3.5 billion barrels of oil may be added to reserves in existing fields. Most additional reserves may come from improved recovery in diatomite reservoirs of the Miocene Monterey Formation. This estimate of potential reserve growth suggests that most oil in the future may come from existing fields rather than from new oil field discoveries in the San Joaquin Basin. (Source: USGE Assessment of Undiscovered Oil and Gas Resources of the San Joaquin Basin Province of California, 2003)
Fred B Zaziski, Chairman of PetroSouth Energy, states: ?The participation in the North Semitropic Prospect located in the prolific San Joaquin Basin enhances our existing portfolio of high-value energy projects. An excellent fit with the Company's overall strategy of delivering sustainable growth focused on developing oil and natural gas reserves.?
Further Information
Shareholders and prospective investors are encouraged to visit PetroSouth Energy?s website: www.petrosouthcorp.com and download PetroSouth Energy?s Investor Summary. Please feel free to call investor relations toll-free at 1-888-977-6884 to receive a full corporate investor's package.
About PetroSouth Energy Corp
PetroSouth Energy Corp. is a publicly traded independent oil and gas exploration company with headquarters in Houston, Texas. PetroSouth Energy aims to secure and develop a portfolio of oil and gas properties. The Company is involved in over 197,333 acres of prime oil and gas land holdings. PetroSouth Energy trades on the NASD OTC BB under the ticker symbol: PSEG.
On behalf of the Board
Fred B. Zaziski, Chairman
Forward-Looking Statements
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements are based on current facts and analyses and other information that are based on forecasts of future results, estimates of amounts not yet determined and assumptions of management, including, but not limited to, the Company's belief that PetroSouth Energy can identify and successfully negotiate leases for oil and gas properties in Colombia and that the Company can participate in the exploration of those properties. Actual results may differ materially from those currently anticipated due to a number of factors beyond the reasonable control of the Company. Additional information on risks and other factors that may affect the business and financial results of the Company can be found in filings of the Company with the U.S. Securities and Exchange Commission.
For Further Information, Contact:
RedChip Companies, Inc.
500 Winderley Place, Suite 100, Orlando, FL 32751,
(800) 733-2447,Fax: (407) 644-0758,
info@redchip.com
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