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Zeta Petroleum Targets Oil Production From New Concession In Romania

Jul. 22, 2013 12:27 AM ET
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Zeta Petroleum (ASX: ZTA) is acquiring a previously producing oil concession in eastern Romania that it plans to bring back into production.

The Grivita Nord oil concession has previously produced 763,457 barrels of oil from two separate structures with new mapping indicating the majority of Reserves in the Southern structure are still to be recovered.

This suggests that only the southwest portion of the Southern Structure has been developed leaving a large unswept area with the potential for a new well to be optimally placed in a crestal location to produce the remaining reserves.

P50 Recoverable Reserves are estimated to be 448,000 barrels of oil with an unrisked NPV10 of US25.55 million (A$27.79), and initial production rates of 761 barrels of oil per day from the one well development.

Subject to finance, Zeta plans to drill the well to a depth of 2,000 metres to bring the field back into production.

Acquisition terms

Zeta has signed a sale and purchase agreement to acquire 100% of the issued capital of Celtique Energie SRL (Celtique Romania), a wholly owned subsidiary of Celtique Energie Petroleum Limited, for a minimal upfront consideration and deferred consideration totalling up to US$2.8 million in the event that cumulative oil production from the field reaches 240,000 barrels of oil.

Celtique Romania's sole asset is its 100% interest in the 3.45 square kilometre Grivita Nord concession.

Zeta noted the acquisition fits well with its investment criteria, having previously produced hydrocarbons while retaining material reserves.

The company had last month produced 26,000 cubic metres of gas per day during testing of the Dornesti Sud-1 well on its 50% owned Suceava gas concession in Romania.

Dornesti Sud-1 has been suspended ready for production and work is being carried out with operator Raffles Energy to bring the Dornesti Sud-1 and SE-1 wells in the concession into production.

Romania has been a leading oil and gas producer in Eastern Europe for over 150 years and remains the largest producer of hydrocarbons in Central and Eastern Europe.

It holds a number of onshore and offshore petroleum basins which are considered under-explored while offering a competitive fiscal regime.

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