Blue Sky Energy Inc. (TSX VENTURE:BSI) has acquired from Sonoro Energy International Holdings BV, 100% of the issued and outstanding common shares of Sonoro Energy Iraq B.V. ("Sonoro Iraq"), a company incorporated in the Netherlands and the designated operator and party to several license agreements with the Al-Salah ad Din Provincial Government of Iraq for the exploration, appraisal and development of petroleum resources.
The primary contract, an Asphalt License Agreement signed in 2010, has been under Force Majeure since July 2013 due, at the time, to the deteriorating security situation.
Prior to that, Sonoro Iraq had conducted various studies, geological and drilling preparatory work, and published an independent prospective resource evaluation report covering the gross license area of 24,363 square kilometers or approximately six million acres. The report was prepared by RPS Energy Canada Ltd. in accordance with NI 51-101 definitions and the COGE Handbook.
In consideration for the acquisition, BSI will make contingent payments to the Vendor, in tranches, totalling up to four million dollars based on the start of crude oil production to eighty thousand barrels per day. In the event that no production is achieved by BSI related to Sonoro Iraq's license agreements, no consideration or payments shall be owing or payable to the Vendor.
Highlights of the Prospective Resource Report:
- Risked Prospective Resources in the Salah ad Din province are estimated on a gross recoverable oil basis to be approximately 5.2 billion barrels (P50), ranging between 1.7 billion barrels (P95) to 10.3 billion barrels (P5).
- The estimated Recoverable Oil Resources for a single field discovery in the province is 200 million barrels (P50), ranging between 10 million barrels (P90) and 4.2 billion barrels (P10), with an expected (mean) field size of approximately 1.3 billion barrels oil recoverable.
- The prospective heavy oil resources (<25°API) are expected to be between 42% and 60% of the total prospective oil resources in the province.
- Recovery factors using the Energy Intelligence data (see note 3, below) indicate recovery factors in the range of 15% to 35% for all discovered fields in the study area (16.8% to 25.6% for the heavy oil fields).
- There is no certainty that any portion of the prospective resources will be discovered. If a discovery is made, there is no certainty that it will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the prospective resources.
(Source: Press Release)