Mr. Jared Lazerson reports
MGX MINERALS ACQUIRES ADDITIONAL 10,000 ACRES OF OIL AND GAS RIGHTS AT PARADOX BASIN, UTAH PETROLITHIUM PROJECT
MGX Minerals Inc. has acquired an additional 10,331.32 acres of oil and gas leases located within the company's unitized 80,380-acre Blueberry unit. The newly acquired leases are located within the proposed 3-D seismic geophysical survey area, which is scheduled to commence in August and will include approximately 9,000 data points. To date the company has conducted a paleontology survey and is nearing completion of the archeological survey.
Under terms of the purchase and sale agreement, MGX has the option to earn a net revenue interest (NRI) on 9,158.4 gross/net acres within the company's area of mutual interest. Details of the agreement are as follows:
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Purchase price of $145,000 (U.S.): An initial instalment of $50,000 has been paid with the remaining instalments due on Sept. 5, 2018 ($50,000), and March 5, 2019 ($45,000).
- The seller delivered an 83.0-per-cent NRI on 8,481.53 acres, and 82.5 per cent on the remaining 677.31 acres.
- On or before Dec. 15, 2021, MGX will drill a well on the largest of the acquired leases to a TVD (true vertical depth) of 8,000 feet or to a depth sufficient to test the Cane Creek shale (Cycle 21) of the Paradox formation.
- MGX has the option to extend the drilling obligation for an additional three years in exchange for payment of an additional $100,000.
MGX also has an option to acquire an additional lease covering 1,172.48 acres if and when that lease is issued by the Bureau of Land Management.
- The Blueberry unit (oil, gas and lithium) and Lisbon Valley claims (lithium) now consist of approximately 115,000 acres of oil and gas leases and 118,000 acres of largely overlying and contiguous mineral claims. Brine content within the Lisbon Valley oil field have been historically reported as high as 730 parts per million lithium (Superior Oil 88-21P).
The project is being simultaneously explored for oil, gas, lithium and other brine minerals to determine locations for deployment of the company's lithium and mineral extraction technology.
Blueberry unit
MGX is currently earning a 75-per-cent working interest in the project, with the remaining interest primarily controlled by the Paradox partner. The Paradox partner has been engaged by MGX as subcontracted operator of the project. The project is host to National Instrument 51-101 estimated prospective resources consisting of leasehold and royalty interests in San Juan county, Utah, and Miguel county, Colorado. The estimate was prepared by the Ryder Scott Company LP, an independent qualified reserves evaluator within the meaning of NI 51-101 -- Standards of Disclosure for Oil and Gas Activities, with an effective date of June 30, 2017. The estimate was prepared in accordance with NI 51-101 and the Canadian oil and gas evaluation handbook.
ESTIMATED GROSS VOLUMES -- UNRISKED PROSPECTIVE (RECOVERABLE) HYDROCARBON RESOURCES
LEASEHOLD INTEREST IN SAN JUAN COUNTY, UTAH, AND SAN MIGUEL COUNTY, COLORADO
As of June 30, 2017
Formation Ultimate recovery oil -- mmbo Ultimate recovery gas -- bcf
Low Best High Low Best High COC*
Paradox clastics
CB2 41.799 59.498 85.324 33.441 47.602 68.266 0.075
CB3 41.915 60.641 85.833 33.536 48.517 68.671 0.075
CB4 12.766 18.745 26.692 10.213 14.781 21.355 0.075
CB5 33.185 48.065 68.841 26.548 38.453 55.074 0.075
CB6 6.603 9.607 13.874 5.283 7.686 11.100 0.045
CB7 1.892 2.735 3.948 1.514 2.188 3.158 0.032
CB8 19.108 27.525 39.079 15.287 22.022 31.264 0.068
CB9 11.452 16.671 23.711 9.162 13.337 18.970 0.068
CB10 14.565 21.169 30.088 11.652 16.936 24.073 0.068
CB11 2.021 2.929 4.244 1.617 2.344 3.396 0.032
CB12 9.352 13.609 19.525 7.482 10.887 15.620 0.045
CB13 9.333 13.158 19.297 7.468 10.815 15.438 0.045
CB14 3.195 4.621 6.634 2.556 3.697 5.308 0.045
CB15 6.455 9.432 13.633 5.164 7.546 10.908 0.045
CB16 2.752 3.987 5.768 2.202 3.190 4.615 0.045
CB17 3.770 5.390 7.835 3.016 4.313 6.269 0.040
CB18 4.673 6.728 9.572 3.739 5.383 7.658 0.045
CB19 16.690 24.226 34.542 13.358 19.381 27.636 0.068
CB20 2.931 4.253 6.118 2.435 3.402 4.895 0.040
CB21 (Cane Creek) 35.336 51.338 73.971 28.272 41.073 59.177 0.097
CB22 5.635 8.261 11.957 4.508 6.609 9.566 0.045
Leadville 1.000 2.100 4.000 153.000 231.700 341.600 0.066
* COC -- chance of commerciality equals chance of discovery.
* Chance of development.
Lisbon Valley and Paradox basin geology
The project is proximate to Lisbon Valley oil field which has approximately 140 wells. According to production statistics, as reported by the Utah Department of Natural Resources, Oil, Gas and Mining Division, cumulative lifetime production within the Lisbon Valley oil field has totalled 51.4 million barrels of oil as of June, 2017. The Paradox basin has been noted by the U.S. Geological Survey as having one of the largest undeveloped oil and gas fields in the United States.
Grant of options
The company also announces it has granted 4.1 million incentive stock options, vesting immediately, in accordance with the terms of the company's stock option plan. The options can be exercised into common shares of the company at a price of 89 cents per share for a period of three years from the date of grant. Directors and officers of the company received 2.3 million of the options granted.
About MGX Minerals Inc.
MGX Minerals is a diversified Canadian resource company with interests in advanced material and energy assets throughout North America.
We seek Safe Harbor.
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