Jul 08, 2011
Doxa Enters Mississippian Oil Play, Oklahoma And Closes Private Placement
VANCOUVER, BRITISH COLUMBIA: Doxa Energy Ltd. ("Doxa" or the "Company") is excited to report that it has exercised its option to acquire a twenty percent (20%) leasehold interest in an existing project situated in the emerging Mississippian Oil Play ("Mississippian Oil Play") in Oklahoma. Under the terms of a previously announced Letter of Intent (see Doxa news April 27, 2011) with Dynamic Production, Inc., as amended, the Company was granted the right to acquire up to twenty percent (20%) interest in existing leases, as well as an ongoing lease acquisition program primarily in Alfalfa, Garfield, Grant and Kay Counties, Oklahoma. Dynamic Production, Inc. of Fort Worth, Texas, is managing the project and has a stated goal of acquiring approximately 18,000 acres within the play. The play is led by Chesapeake Energy Corporation, SandRidge Energy, Inc. and Eagle Energy of Oklahoma, LLC. Doxa estimates that it will ultimately acquire 3,600 net acres in this round of leasing, at a cost of approximately US$2,200,000.
John D. Harvison, President and CEO of Doxa stated today that: "The Mississippian Oil Play is an emerging horizontal play that has the potential to become one of the most profitable domestic onshore oil plays today, and as such has the potential of providing significant growth for Doxa as well as exceptional value for our shareholders."
According to recent public disclosures by these leading companies, this play exhibits excellent economics with single well estimated ultimate recovery projected at 300-500 MBOE and with drilling and completion costs estimated at US$3.0mil per well. In recent presentations to various professional associations over the past months, SandRidge has reiterated that it expects to achieve over 100% *ROR, and a net present value per well of approximately US$5.9mil, based on recent Nymex strip pricing. Based on current knowledge of well spacing disclosures from area operators, Doxa anticipates that up to 72 gross wells may ultimately be drilled on the acreage block, or 14 wells net to Doxa, based on its twenty percent (20%) participation level. The Company plans to release additional information on the proposed acquisition once details are finalized.
Doxa Energy is also pleased to announce that its previously reported $2,000,000, non-brokered private placement (see Doxa news June 13, 2011) has now closed. In addition to initial investment in the Mississippian Oil Play, proceeds of the placement will be used to fund the Company's numerous oil and gas projects in Texas. A total of 5,714,286 units (each a "Unit") were issued at a price of $0.35 per Unit, raising gross proceeds of $2,000,000. Each Unit comprised one common share and oneshare purchase warrant. Each share purchase warrant ("Warrant") entitles the holder to acquire one additional common share for a period of three years at a price of $0.475 per share. .
John D. Harvison
President & Chief Executive Officer
For further information contact: Scott Parsons or Paul McKenzie, Directors at 604-662-3692 or visit www.doxaenergy.com