DALLAS, Dec. 9, 2013 (GLOBE NEWSWIRE) -- Gray Fox Petroleum Corp. (OTCBB:GFOX) (herein after "Gray Fox," and/or "the Company") is pleased to announce its initial exploration plan to identify drilling targets on its 32,723-acre West Ranch Prospect (100% Working Interest; 82% Net Revenue Interest). The prospect is comprised of 22 Federal leases in the Butte Valley Oil Play Region of north-central Nevada, located in Elko and White Pine Counties, 50 miles north of Ely, NV.
An independent report on Gray Fox's West Ranch Prospect conducted in May 2012 indicates the prospect offers potential for oil discovery over two large anticlinal structures within multiple prospective horizons. The two main targets are the Mississippian Diamond Peak sandstones and the deeper Devonian Guilmette dolomitic carbonates. While the exploration program has the potential to result in the discovery of additional structures, its main focus is to refine the structural parameters of the two anticlinal structures already identified, while simultaneously reaching the crest of both structures.
Previously, two test wells were drilled within the boundaries of what is now the Company's West Ranch Prospect oil and gas lease position. According to a report undertaken by Gray Fox's Head of Exploration, Consultant Geologist William J. Ehni, while neither well penetrated the deeper Guilmette horizon, the Permian section has in fact returned multiple oil showings for both wells, indicating the potential for commercial accumulations of oil and gas near both well sites.
The Company's initial exploration plan is designed to identify new drilling locations targeting the peak of the structural closures. The 8-phase exploration plan is designed to systematically reduce risk and optimize selection of one or more new drilling targets by incorporating the results of the two wells drilled to date. (See below for full exploration plan details).
EXPLORATION PLAN OUTLINE
Phase 1 – Acquire Gravity and Magnetic Data:
All available non-exclusive gravity and magnetic data in the areas of interest will be acquired, as well as any additional proprietary data. This data will then be used to reinterpret the prospect's geology with a more complete data set than was initially used when selecting the two older wells. This action has the potential to reveal any targets the original two older wells may have missed.
Currently available non-exclusive data includes gravity data spanning 2,000 gravity stations and over 600 line miles of magnetic data. Supplemental data will include an additional 100 new gravity stations.
Phase 2 – Interpretation of Gravity, Mag and Surface Mapping:
Gray Fox will use all data sets, combined with surface geology and an airphoto interpretation, to refine the structural parameters of the two already identified anticlinal structures. The aim of this is to reach the crest of those structures, while simultaneously identifying any additional structures that might host commercial quantities of oil and gas. This will be achieved through the use of gravity data to identify faults, structural highs and Tertiary basin geometry. Magnetic data will also be used to delineate faults and a magnetic basement structure.
This interpretation will rely on "ground truth" established in the two existing wells, while focusing on possible structural highs that are updip from oil shows observed near these wells. Both historic wells have excellent oil shows, and exploring for structural highs near these wells, and/or moving updip from these will be the main focus of the company's exploration efforts.
Phase 3 – Seismic Permitting:
A contractor/seismic company will be hired to handle the Bureau of Land Management (BLM) and State-private property permitting process for seismic data acquisition. This process occurs at the point of acquisition.
Phase 4 – Acquire and Conduct Seismic:
Seismic data will be acquired, as available, across any potential traps or structures near the two existing wells. This will be done in order to map any structures identified in the gravity and magnetic data, as accurately as possible, while also reducing the risk of any subsequent drilling efforts. It is estimated that at least 10 miles of existing data will be located and acquired. In order to satisfactorily evaluate the Company's sizeable lease block and tie the two existing wells together with outcrop control, at least 30 miles of new seismic data will be required.
Phase 5 – Interpret Data Sets:
A complete geologic and geophysical interpretation will enhance the possibility of locating a successful oil and gas drill site. The shows reported on the two existing wells have been extremely encouraging, and either one or both of the wells might have missed a commercial accumulation of oil by only a few hundred feet. Through the acquisition of additional seismic and gravity data, drilling targets of wells that might have been missed will be identified.
In turn, the Company might be able to reach the crest of the two identified anticlinal structures.
Phase 6 – Define Drilling Location(s) and Reserves Assessment:
Define exploration well location(s). The Company will obtain a petroleum engineer's assessment of potential reserves for target-horizons, through an independent third party.
Phase 7 – Commence Well Permitting Process:
Commence well permitting process - surface and target locations may be revised/ amended at a later stage.
Phase 8 – Decide on Drilling Strategy:
During this phase, the Company may decide to (a) pursue drilling on an individual basis, (b) seek an outside drilling partner, or (c) forego drilling at this time.
See below for further details:
- (a1): Finalize well permit for drilling;
- (a2): Go to tender for well;
- (a3): Spud, drill and test well. If the well proves to be unsuccessful, the Company will move ahead with option (a4). If the well proves to be successful, the Company will move ahead with option (a5);
- (a4): Evaluate alternative well locations and reimplement stages (a1) to (a4), or move to option (b), or move to option (c);
- (a5): Fully define a field development plan, unitize leases and commence production;
- (b): Identify prospective drilling partner companies and engage in discussions with the objective of pursuing options (a1) to (a3), as listed above; or,
- (c) Decide on whether or not to retain lease acreage
FOR ADDITIONAL INFORMATION
Read more about the West Ranch Prospect, and additional information about the Company and its latest press releases, at Gray Fox's corporate website: http://www.grayfoxpetro.com.
ABOUT GRAY FOX:
Gray Fox Petroleum Corp. (OTCBB:GFOX) is a domestic oil and gas exploration and development company, which is focused on expanding the 135+ year tradition of Western U.S. energy production by engaging in the acquisition and exploration of oil and natural gas properties in the Western U.S. The Company implements this business focus by pursuing interests in oil and natural gas properties through strategic lease acquisition activities.
This press release contains statements that are forward-looking and which involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements in question are based on Gray Fox Petroleum Corp's current expectations and projections about future events, based on information currently available. The forward-looking statements found in this press release may also include statements relating to Gray Fox Petroleum Corp's anticipated financial performance, business prospects, new developments, strategies, and similar matters. Gray Fox Petroleum Corp. provides no assurance regarding the actual outcome of the events contemplated by any forward-looking statements included in this release. Gray Fox Petroleum Corp. disclaims any obligation to update any of its forward-looking statements, except as may be required by law.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this press release, such as resource potential, reserve potential, probable resources, possible resources, contingent resources, prospective resources, exploration target size, measured resources, indicated resources, and inferred resources. The SEC guidelines strictly prohibit us from including these terms in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K, which may either be secured from us or from our website at http://www.grayfoxpetro.com.