Salt Lake City, Utah – April 14, 2008 – Apex Resources Group, Inc. (OTC BB:APXR) Announces Two Of The World’s Biggest Oil Companies, British Petroleum And ConocoPhillips, Joined Forces To Spend Billions To Build Alaska Pipeline.
At a time when consumption of natural gas in the United States is increasing and conventional production is declining, two of the world’s biggest oil companies, British Petroleum and ConocoPhillips, joined forces to spend billions to build Alaska Pipeline from the North Slope. The pipeline will move approximately four billion cubic feet of natural gas per day to markets, and will be the largest private sector construction project ever built in North America. The project combines the financial strength, arctic experience and technical resources of two of the most capable and experienced companies in the world.
In seeking state and federal approval, and secure gas supplies for the pipeline, British Petroleum and ConocoPhillips will initially spend $600 million in the next three years, commencing before year end 2010. The project would include a $5 billion gas-processing facility on the North Slope, would cost about $30 billion and take at least 10 years to complete. The planned pipeline would have a daily capacity of 4 billion cubic feet of natural gas, or almost 7 percent of current United States consumption.
Currently, Alaska’s estimated 35 trillion feet of gas reserves are either re-injected into oil fields or left dormant because of a lack of export facilities to bring them to consumers. But rising with prices, and increasing demand for natural gas, the economics of such a large project are starting to make sense for oil companies. The initial plan is to build a 2,000-mile pipeline from Alaska’s North Slope to the Canadian province of Alberta. This would add to the total North American gas supply, while freeing some Canadian gas for export to the United States, with the potential that the pipeline might be extended 1,500 miles, to Chicago. It will allow to keep the North Slope fields in production for another 50 years.
The project will have a gas treatment plant on Alaska’s North Slope and a large-diameter pipeline which travels over 700 miles through Alaska, into Canada through the Yukon Territory and British Columbia to Alberta. In case it is required to transport gas from Alberta, the project will also include a large diameter pipeline from Alberta to the Lower 48 states. British Petroleum and ConocoPhillips will seek other equity partners, including pipeline companies, who can add value to the project and help manage the risks involved. Although the plan came as a surprise to Exxon, which said it had been invited to participate only a few days ago, it will evaluate all options. British Petroleum and Conoco said they would welcome Exxon’s participation.
British Petroleum & ConocoPhillips already have assigned staff to the joint project team and a new project headquarters in Anchorage will be identified and a new company formed to manage the project. The project will provide jobs and business opportunities as well as becoming a key component for the nation's energy security which will provide a stable supply of affordable natural gas to the Lower 48 for decades to come.
While the joined forces of British Petroleum and ConocoPhillips to build the Alaska pipeline competes with TransCanada Corp., the only company cleared by Alaska to build a pipeline from that state to the continental United States, TransCanada Corp. wants to align with the two oil-and-gas. Enbridge Inc. also said it wants a slice of project. The proposed pipeline by British Petroleum and ConocoPhillips appears to follow the same route as TransCanada's plan. TransCanada has sought and continues to seek alignment with the three oil-and-gas producers in Alaska's Northern Slope -- ConocoPhillips, British Petroleum and ExxonMobil Corp. as well as the state government in any pipeline project.
British Petroleum and ConocoPhillips are open to working with third parties as they forge ahead with plans to construct the pipeline and TransCanada and Enbridge could be among those players. Enbridge wants to be part of a plan that includes the producers and would want to take a 10% to 20% equity stake in such a plan.
The TransCanada proposal is the only one being reviewed under the Alaska Gasline Inducement Act, but other projects can go proceed, and seek regulatory approval in the United States and Canada, outside of the AGIA process.
Meanwhile, the backers of the proposed Mackenzie Valley natural gas project say the British Petroleum-Conoco Philips plan to build a pipeline in Alaska will not change their plans to run a pipeline through the Northwest Territories.
The $16.2-billion 1,220-kilometre Mackenzie Valley pipeline would carry natural gas south from the Mackenzie Delta near Inuvik south through the N.W.T. to gas markets in Alberta and is scheduled to start production in 2014, providing it receives all the regulatory approvals needed to proceed. The BP/ConocoPhillips project, dubbed Denali, aims to secure its regulatory approvals in five years. ConocoPhillips is also part of the Mackenzie pipeline consortium, which includes Shell Canada, Exxon Mobil and the Aboriginal Pipeline Group. The consortium hopes to find out this year whether it will get those regulatory approvals.
APEX RESOURCES GROUP INC. PROVEN, PROBABLE & POSSIBLE GAS & OIL RESERVES IN THE ITIYOK I-27 SDL #55 IN THE BEAUFORT SEA:
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The progress of either of the Pipelines being build, adds significant value to the interest that Apex has in the Beaufort Sea Significant Discovery Lease #55. Apex Resources Group Inc. owns 3.745% working interest in the Itiyok I-27 Well (SDL#55) in the Beaufort Sea and is the fourth largest partner in the Itiyok I-27 Well with a 3.745% working interest, with Imperial Oil as the operator and the largest partner with an interest of 58.67312%. At current oil & gas market prices, the Apex 3.745% working interest (Apex Value) in the Itiyok I-27 Well in the Beaufort Sea is estimated over US$1.75 Billion Dollars.
ITIYOK I-27 WELL SIGNIFICANT DISCOVERLY LEASE#55 PROVEN, PROBABLE, & POSSIBLE GAS & OIL RESERVE VALUES AT CURRENT PRICES:
ITIYOK I-27 WELL (SDL #55) PARTNERS IN ORDER OF HIGHEST %:
DEVON ARL CORPORATION 14.72 % PETRO - CANADA 14.20 % APEX RESOURCES GROUP INC. 3.745 % CONOCOPHILLIPS CANADA RESOURCES CORP. 3.003 % CANALANDS RESOURCES 2.255734 % CANADIAN NATURAL RESOURCES LIMITED 1.23445 % CANADIAN FOREST OIL LTD. 1.084348 % 677862 ALBERTA LTD 1.084348 %
The Itiyok I-27 Well (SDL#55) was originally drilled in 1983, at a total cost of CAD$85 million. A review of Well data and geological prognosis indicates that a 640 acre area would contain proven recoverable gas reserves of 108 Bscf and proven recoverable oil reserves of 8,976 MSTB, with Apex Resources Group Inc. 3.745 % working interest net reserves of 4.04 Bscf and 336 MSTB.
Seismic data indicates a structure closure of approximately 40 square KM with a gross potential reserve of 1.16 TCF and 160 MMSTB (Apex 3.745 % working interest net – 34 Bscf and 4.7 MMSTB). The lands in which the Apex Resources Group Inc. owns an interest comprised of 21.54 square KM containing gross potential reserves of 625 Bscf of gas and 86 MMSTB of oil Apex 3.745 % working interest net - 23.4 Bscf of gas and 3.2 MMSTB of oil). Values of proven, probable and possible gas and oil reserves, of Apex 3.745 % working interests, as per Citadel Engineering report, have been published in previous news releases.
By the Board of Directors,
John Ray Rask President Apex Resources Group, Inc. www.ApexResourcesGroup.com
The foregoing contains forward-looking statements. For this purpose any statements contained in this document that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, such words a "may", "will", "believes", "anticipates", "estimates", "continue", or comparable terminology intends to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties and actual results may differ materially depending upon a variety of factors, including, but not limited to, the successful negotiation and execution of the definitive acquisition agreement and receipt of certain exhibits and schedules requested by Apex Resources Group, Inc.
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