VANCOUVER, British Columbia, Dec. 20, 2004 (PRIMEZONE) -- Goldnev Resources Inc. (Other OTC:GDNXF) (TSX Venture Exchange:GNZ) is pleased to announce the signing of Agreements (by its wholly owned subsidiary, Trophy Petroleum Corporation) to farm-in on 2.5 sections (1,600 acres) offsetting the Kitty 8-35-85-11-W5M well, subject to acceptance for filing by the TSX Venture Exchange and completion of the appropriate due diligence by management of Goldnev.
The project consists of drilling a test well to contract depth of 1,600 meters (more or less) at a location of Goldnev's choice to earn 50% of the Farmor's interest in that portion of the farm-out lands comprising the section in which the test well is located. In addition Goldnev is granted the right to drill one or more option wells to earn an interest in the remaining farm-out lands (on the same terms and conditions) until all of the option lands are earned, or Goldnev has surrendered its right to earn in the option lands.
Through the investigation of recently acquired 3D Seismic and geological data, covering 16 sections of land in the Kitty area (which includes the Kitty 8-35 oil well), a location for the farm-in test well will be selected in the next 30 days. The mapping, on preliminary examination, indicates Slave Point Prospects at two or more locations on the farm-out lands, however, a location to test the deeper Keg River Sands will probably be the first test well selected. Keg River Zone production in this immediate area has yielded in excess of 100,000 barrels per well as indicated by Alberta Energy Board statistics, and Goldnev expects to encounter a productive Keg River Zone with similar reservoir characteristics on the farm-out lands.
The expected drilling cost to evaluate the Keg River Zone is in the order of $750,000.00. Completion and equipping costs would be in the range of $250,000 to $400,000, however, the Kitty 8-35 well would share some of the costs to utilize joint production facilities. Final cost estimates will be governed by the Farm-out well location, and the productivity of the wells.
Goldnev Resources Inc. is also currently negotiating another Farm-in Agreement whereby Goldnev would have the right to earn an interest in a 5 well gas well drilling program in southern Alberta. This Agreement is expected to be finalized in the near future, and details will be announced at that time.
ON BEHALF OF THE BOARD
'George Isfan'
GEORGE ISFAN,
President and Chief Operating Officer
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of the News Release.