THE WOODLANDS, Texas, Sept. 20, 2005 (PRIMEZONE) -- Tekoil & Gas Corporation (Pink Sheets:TKGC), an oil and gas exploration and production company, is pleased to announce that it has completed extensive engineering planning for the first of three prospects in its Eastern Canadian Production Development. This includes a detailed $8.8 million Seismic Program, a comprehensive Production Development Plan, a complex Drilling Plan (including gas-cycling), and an Electricity Generation Plan for 25 mega watts of electricity, which will supply the local grid.
Mark Western, Tekoil's Chairman & CEO stated, "Our engineering team led by Fekete Associates, Inc. (www.fekete.com), have done an outstanding job during the past two months and have produced a world-class plan for our first prospect. Having completed a PVT compositional analysis, we realized from the outset that this development would be multi-faceted, with an opportunity to use gas-cycling to dramatically increase liquids recovery from the reservoir."
Mr. Western went on to say, "The first prospect contains three target structures that contain millions of barrels of propane, butane and 49 degrees API, high quality sweet crude. By utilizing industry standard formulae, the oil recovery from the first prospect is conservatively estimated to be in excess of 25 million barrels. The compositional analysis also indicates that the prospect has Raw Gas (C1, C2 and inert), Methane and Ethane recoverable potential in excess of 100 Billion cubic feet. Based upon this knowledge, the long term development potential for this field is outstanding."
By utilizing a conservative figure of $35 per BOE (barrel of oil equivalent), management anticipates that the project will become self funding during 2008, and with 7 wells completed, will produce revenues in excess of $120 million during the same year. By 2010, with 13 wells completed management anticipates that the project will produce revenues in excess of $250 million.
The company has already identified an investment fund that has pledged $80 million for the projects long term development, and is currently negotiating with several financial partners for the initial development capital of $20 million. A project and reserve summary, and an introduction to Tekoil's engineering team can be found under "Operations" on the company's website at www.tekoil.com.
About Tekoil & Gas Corporation:
Houston-based Tekoil & Gas Corporation, is a technology driven, oil and gas exploration and Production Company that utilizes advanced production technologies. The company is focused on the development, acquisition, stimulation, rehabilitation, and asset improvement of small to medium-sized oil and gas fields throughout the North American Continent. The combination of energy fuel reserves and advanced yield technologies, are anticipated to generate value for Tekoil and its stakeholders, as the company targets above average growth in the 21st century energy sector. Additional news and information will be made available on the Tekoil website at www.tekoil.com, and through further press releases as acquisitions and development projects are executed.
Forward-Looking Statements:
This news release may contain certain forward-looking statements, including declarations regarding Tekoil and its subsidiaries' expectations, intentions, strategies and beliefs regarding the future within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements contained herein are based upon information available to Tekoil management as at the date hereof and actual results may vary based upon future events, both within and without the control of Tekoil management, including risks and uncertainties that could cause actual results to differ materially including, among other things, the impact that additional acquisitions may have on the company and its capital structure, exploration results, market conditions, oil and gas price volatility, uncertainties inherent in oil and gas production operations and estimating reserves, unexpected future capital expenditures, competition, governmental regulations and other factors.