|>>> IMPORTANT UPDATE December 30th, 2013 - OCTAGON 88 RESOURCES PROVIDES SHAREHOLDERS WITH CORPORATE UPDATE|
Acquired Jan 22, 2013 Octagon 88 Resources successfully launched Conventional Oil Production Division by entering into a purchase agreement to acquire its share in the Red Earth Area consists of 4 contiguous sections of P&NG leases, a ( 40 API) Keg River formation with P3 reserves of 1.2 Mill bbls. light sweet crude oil recoverable, NPV(10%)$31,000,000CAD. The evaluation is based on the last 3D seismic program. P3 drill targets planned for 2013 with sweet crude oil. Initial production projected 300 to 500 bbl/d. There are extensive long term Keg River developments in the area possesing quick net backs on capital with low operating costs.
CEC North Star
Late 2012 Octagon 88 laid the foundation in what management believes
to be the next decade of success for the Alberta Oilsands,
securing 33% ownership of
CEC North Star LTD.
CEC North Star LTD has set sights on three "sweet spots" which they project early stage development of 2000 barrels a day; thereafter all efforts will be combined to obtain the greater goal of unlocking the potential of these projects in progressing to be a 200'000 barrel a day company.
The recovery process at large has been determined by management and third party engineering firms as a 3.6 billion PIIP (Petroleum-Initially-In-Place) development.The last two transactions made between CEC North Star and Octagon 88 Resources equate to $90,000,000 and makes Octagon 88 the largest publicly traded shareholder of CEC North Star LTD.
Multiple stages of channel development (incised valley deposits), similar to productive Peace River channel sandstones to the south are believed to occur to the southeast of Manning. Seismic is required to delineate channel thickness and heavy oil prospectively. Evaluation of drilled wells in the area indicates that porosity ranges up to 30% and that heavy oil saturation occurs. The sandstones are very fine (marine) to medium grained (estuarine to fluvial), salt and pepper (i.e., quartz and chert composition) and variably glauconitic.
The Bluesky core reviewed show definite oil content – in addition corresponding logs for this well, compare favorably with the well identified on CEC Project B. With mapping already completed the support of this core proving presence of oil, the confidence of a Bluesky Channel on Project B is strengthened. Several lines of trade seismic have been purchased over the area to more fully map the channel overall area in preparation for an independent engineering report as well to identify the thicker parts of the channel for the drilling and core program planned for 2013.
Elkton & Debolt
The Elkton Debolt combined carbonates are thick (up to 35m), slightly dolomitic limestone (wackestones-packstones) with variable oil saturation. Observed porosity ranges up to 24%. The geology is somewhat similar to the erosional edge play, except they are further down dip and thicker. Fluid saturations vary throughout and permeability may be slightly lower.
The Erosional Edge
The Erosional Edge on the Elkton Debolt Members includes dolomitic, highly oil saturated limestone (packstones to mudstone) that were deposited in a shoaling upward carbonate environment. Both porosity and permeability have been enhanced near the formations’ erosional edges. Thickness ranges from approximately 6-20 meters, and porosity values are up to 28%. These reservoir rocks are relatively homogeneous compared to the karsted Devonian Grosmont Formation.
The Cores from comparable Erosional Edge wells in the Peace River Block as mapped over Projects A and C and over portions of B are very positive – with one well drilled recently showing very thick zones of Elkton/Debolt with obvious oil wetting. These projects have opportunities for primary production without stimulation or EOR (enhanced oil recovery) as the oil in the erosional edge is expected to be of a lighter API (density) than the main thicker Elkton/Debolt zones. Cold flow or primary production would dramatically add to early stage economics as the projects develop. This is the primary target for the Q2 2012 drill program as typically seen in other comparable; migration of lighter viscosity oil to the erosional edge is common – geologic studies suggest potentially similar results to Shell Chipmunk, Baytex Seal etc. Also, the erosional edge corresponds to Laricina's Saleski project on the erosional edge of the Grosmont Carbonate Trend.