BayHill Capital will acquire an aggregate of 12,612 acres of oil and gas leases from five entitles, with proved reserves of US$80 million in gross value, probable reserves of US$50 million in gross value, and possible reserves of US$180 million in gross value, based on internal preliminary geological and engineering studies.
Grassy Trails Oil Field was acquired by Genesis Energy in May 2007. It is an oil and gas field located in Emery County and Carbon County, Utah, the US and is well situated on the split north plunge of a regional-scale anticlinal feature known as the San Rafael Swell that has a large catchment area from which to concentrate oil and gas from two rich petroleum systems. Grassy Trails Oil Field encompasses a total of 6,268 acres and it has yielded approximately 600,000 barrels of golden-colored, light, sweet crude oil since its discovery in 1962.
By injecting Grassy Trails Oil Field into the joint venture, the Group will receive BayHill¡¦s shares. Genesis Energy Chairman Mr Terence Kong said: "We are excited to announce this joint venture for further exploring and developing our oil and gas business in the US. The injection in essence will broaden our oil and gas assets portfolio through holding shares in BayHill. This will enable us to leverage on the strategic pool of US assets and expertise, and to enjoy the potential business prospects of other oil and gas properties while diversifying the risks associated to one single oil field. ¡¨
The new BayHill energy joint venture aims to consolidate several oil and gas operating companies and strategic properties on which significant reserves can be developed to gain critical operating mass. BayHill will be engaged in the business of oil and gas production, development, exploration and the accumulation of oil and gas reserves.
Mr. Robert K, Bench, BayHill President and Chief Executive Officer stated: ¡§We believe these investments, and continued investment in oil and gas reserves is a significant opportunity for the following reasons: We have already begun the process of attracting experienced management to the company. We believe that oil is presently under priced based on historical demand and future supply; further we believe that recent technology and recovery methods along with the present property prices and drilling costs have made development of oil more economical, that global currencies will suffer depreciation compared to commodity prices during the next several years, and alternative sources of energy, available today, do not become economically comparable to oil at less than US$100 per bbl.¡¨
This transaction is conditional upon the satisfactory completion of the due diligence exercise on BayHill conducted by the Group and on Grassy Trails Oil Field conducted by BayHill, as well as completion of acquisition of all other oil and gas assets of the other parties by BayHill.
About Genesis Energy Issued by : Through :
Genesis Energy Holdings Limited (HKEx: 702) is an energy company with a key focus on oil and gas, as well as renewable sources of energy. The Group is committed to building a diversified portfolio of energy assets and operations with the aim of developing into one of the leading independent energy businesses in Greater China. The Group currently operates oil and gas fields in the US and the PRC.
Genesis Energy Holdings Limited
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