GREENCASTLE Resources Ltd.

Gold: Nevada & West Africa - Oil and Gas: Saskatchewan & St. Lawrence Lowlands, Quebec.

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Message: Re: QUESTION-Can the oil royalty become larger? How much larger?

Re: QUESTION-Can the oil royalty become larger? How much larger?

posted on Jan 24, 2007 04:13AM

Dear Goldilox,

Thank you for your inquiry.  Please see the excerpt below regarding Greencastle Resources Oil and Gas Royalty.  This information was retained from the company’s Management Discussion and Analysis filed on November 24th 2006.  To view the “MD&A” in its entirety please click on the link below.

 http://www.sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00009979

The Company currently holds interests in certain oil and gas prospects in west central Saskatchewan. These prospects are located near existing producing oil and gas fields and identified as follows: Primate, Primate North, Peck Lake and Manitou.

Exploration in winter 2004 at the Primate prospect intersected a productive heavy oil zone. In November 2004, Greencastle entered into a seismic option agreement with Trigger Resources Ltd, a Calgary-based private oil and gas exploration company, to continue exploration, development and production at Primate. Under the terms of the Agreement, Trigger is responsible for all costs associated with the development of the field. Greencastle retains a sliding scale royalty on all production. During 2005, Trigger completed four wells on the Primate property and at year end was producing oil from three wells on the section. To date in 2006, a further five wells have been completed. Forecasting royalty income from production is difficult due to the variation in production rates of the individual wells as well as to the significant seasonal variations in pricing of the heavy oil on delivery.

Regards,

AGORACOM Investor Relations

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