Ticker: EW (TSXV)
VANCOUVER, May 24, 2011 /PRNewswire/ - East West Petroleum
Corp. ("EWP" or the "Company") and Naftna Industrija Srbije j.s.c.
Novi Sad ("NIS") are pleased to announce the final stage of
conclusion of agreements for upstream cooperation which is to
rapidly advance the development of its four Romanian onshore blocks
EX-2 (Tria), EX-3 (Baile Felix),
EX-7 (Periam) and EX-8 (Biled). The joint exploration
programs planned will include the collection and processing of
approximately 900 km of 2D and 600 sq km of 3D seismic data with a
minimum of 12 wells to be drilled on the four blocks in
Romania. The terms of the agreement are: NIS will fully fund
all environmental work, 2D and 3D seismic acquisition and
processing, and the drilling of 12 wells, to earn an 85%
participation interest. NIS will also refund 100% of EWP's
sunk costs which total C$525,000 and
EWP will retain a 15% carried interest to commercial production on
all four blocks.
In an earlier agreement the Company signed
Concession Agreements for four onshore exploration blocks EX-2
(Tria) EX-3 (Baile Felix), EX-7
(Periam) and EX-8 (Biled) with the Romanian National Agency of
Mineral Resources.
The new petroleum licenses are located in the
western region of Romania within
the prolific Pannonian Basin. The blocks have a combined area
of approximately 1,000,000 acres. The blocks, which contain
multiple exploration targets, lie within a major producing region
of western Romania. The blocks have been only moderately
explored, with previous exploration on the acreage generally
limited to shallow structural traps. The Company has
identified a number of structural and stratigraphic leads in the
deeper section and plans to focus its exploration activities on the
conventional oil and gas potential in addition to unconventional
shale gas potential.
EWP and NIS plan to cooperate extensively to
explore for and produce oil and gas from the four concession
areas. Both conventional and unconventional resource
potential has been identified on the acreage, which is situated
close to numerous oil and gas fields. The joint work programs
planned will include the acquisition and processing of
approximately 900 km of 2D and 600 sq km of 3D seismic data during
the first two years of operations. The new seismic data will
be used to high-grade a number of prospective conventional oil and
gas leads already identified on the acreage, to further study the
unconventional shale potential and select drilling sites.
Under the terms of the agreement East West will retain a 15%
carried interest through Phase 1 (compulsory) and Phase 2
(optional) exploration periods as well as a carried interest on any
discovery through to the declaration of commerciality. EWP
will retain a 15% share of all production realized from the four
concessions.
NIS is a leading explorer in this sector of the
Pannonian Basin. NIS is currently carrying out extensive
E&P operation in the Vojvodina region of northern Serbia,
immediately adjacent to the Romanian Periam and Biled
Concessions. NIS's operational capabilities and knowledge of
regional geology are expected to contribute significantly to the
success of the Romanian exploration programs.
The exploration programs are subject to final
ratification of the Concession Agreements by the Government.
The farmout to NIS will be subject to further agreements and
approval of NAMR, which is expected to take place soon after the
Government of Romanian ratifies the Concessions.
"The cooperation agreement with East West will
allow NIS to expand its presence outside Serbia and to implement
NIS's strategy of becoming an active player in the Balkan energy
market. Participation of NIS in the project as operator will allow
us to further our experience in the region and to apply innovative
technologies for developing conventional and unconventional
resources," commented Kiril
Kravchenko, NIS Chairman of the Management Board.
Denis Sugaipov, the COO of NIS Company said:
"The deal with East West Petroleum has several operational
synergies for both companies and benefits for the Romanian energy
sector. NIS's geological knowledge of Pannonian basin and its
success in development can be applied to an area which is analogous
to the Serbian North Banat region. In addition, EWP can contribute
its technical expertise in unconventional resources. I hope that
this deal will show results in the near future and contribute to
the development of the Romanian energy sector, enabling the
sustainable development of the entire region."
David Sidoo,
Chairman of East West commented, "These agreements are the
culmination of many months of hard work and we are confident that
in Naftna Industrija Srbije, a subsidiary of Gazprom Neft, we have
sourced a key and strategic partner, with substantial operating
experience and the necessary financial and operating
capabilities which can be applied to the Romanian concessions and
can very quickly advance with the development of the Romanian
concessions."
ABOUT EAST WEST PETROLEUM CORP:
East West Petroleum Corp. trades on the TSX
Venture Exchange under the symbol EW. East West is an
emerging exploration and production company focused on conventional
and unconventional petroleum resources. Currently East West
has producing assets in Egypt and
Canada, and exploration and
exploitation assets in India, five
million acres in a joint study agreement with Kuwait Energy in
Egypt, Yemen, Russia, Ukraine and one million acres in Romania.
ABOUT NAFTNA INDUSTRIJA SRBIJE J.S.C. NOVI
SAD
Naftna Industrija Srbije j.s.c. Novi Sad was
established in 1991 as a public company for exploration,
production, refining and trade in crude oil, petroleum products and
natural gas. Since 2005, NIS has operated as a joint stock
company. In 2009, based on the international agreement
between Russia and Serbia, 51% of
NIS shares were acquired by the Russian company "Gazprom Neft", one
of the largest and fastest growing E&P companies in
Russia. Today, NIS is one of the largest, vertically
integrated oil and gas companies in Southeast Europe, dealing with exploration,
production and refining of crude oil and natural gas, as well as
with the sales of a broad range of petroleum products.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE East West Petroleum Corp.