Apr 28, 2011
Doxa Set To Expand Into Horizontal Mississippian Oil Play, Oklahoma
VANCOUVER, BRITISH COLUMBIA: Doxa Energy Ltd. ("Doxa" or the "Company") announces that it has entered into a Letter of Intent ("LOI") to acquire an option of an undivided leasehold interest under approximately 18,000 gross acres in the emerging Mississippian Oil Play ("Mississippian Oil Play") in Oklahoma. The LOI, entered into with managing partner, Dynamic Production, Inc. of Fort Worth, Texas, provides that Doxa will have until May 20, 2011 in which to elect to acquire up to twenty percent (20%) under the recently assembled lease block, resulting in 3,600 net acres to the Company. 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. The Mississippian Oil Play is led by Chesapeake Energy Corporation, SandRidge Energy, Inc. and Eagle Energy of Oklahoma, LLC. All of Doxa's proposed leases are situated in Alfalfa, Garfield, Grant and Kay Counties, Oklahoma.
According to recent public disclosures by these leading companies, this play exhibits excellent economics with single well estimated ultimate recovery projected at 300-400 MBOE and with estimated drilling and completion costs under US$3.0mil per well. In its presentation to the IPAA this month in New York, SandRidge announced that after drilling 52 wells in the play, it expects to achieve over 150% *ROR, and a net present value per well of US$6.3mil, based on the Nymex strip pricing as of March 18, 2011. Based on current well spacing estimates from area operators, Doxa anticipates that up to 72 gross wells may ultimately be drilling on the acreage block, or 14 net wells to Doxa, provided it elects to participate for twenty percent (20%). The Company plans to release additional information on the proposed acquisition once details are finalized. The terms of the LOI provide for closing on or before June 3, 2011. At this time Doxa is unaware as to whether or not the aforementioned volumes and estimates pertaining to the Mississippian Oil Play are NI 51-101 compliant.
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
*ROR refers to first year Rate of Return
Neither TSX Venture Exchange nor its Regulation Services providers (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Statements in this press release other than purely historical information, including statements relating to the Company's future plans, objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to the risks and uncertainties inherent in the Company's business, including risks inherent in oil and gas exploration and development, and uncertainties in connection with anticipated commodity prices for oil and natural gas, growth of worldwide market demand, exploration capital requirements, length of asset life and availability of qualified personnel, among others As a result, actual results may vary materially from those described in the forward-looking statements.
All references in this press release to BOE are based on a 6 Mcf to 1 Bbl conversion ratio. BOE's may be misleading particularly if used in isolation. A BOE conversion of 6 Mcf to 1 Bbl is based on the energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. One MBOE is defined as one thousand barrels of oil equivalent.
This new release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in the United States. The securities of Doxa have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to or for the account or benefit of a U.S. person unless so registered or pursuant to an available exemption from the registration requirements of such Act or laws.