Admiral Bay Contracts To Buy Gas From Indepedent Operators In The Devon Project Area, Kansas.TORONTO -- Shiloh and Devon Project Update Admiral Bay Resources Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension VENTURE:ADB (Apple Desktop Bus) A low-speed serial bus for connecting keyboards, mice and other input devices on Apple IIgs and Macintosh computers. Starting with the iMac in 1998, the ADB was superseded by USB. ) announced today the signing of its first two contracts to purchase gas from private operators in the Devon project area, in southeast Kansas Southeast Kansas is a region of the U.S. state of Kansas. It can be roughly defined by Woodson County in the northwest, Bourbon County in the northeast, Cherokee County in the southeast, and Montgomery County in the southwest. .The parties are projecting initial sales of gas into the Company's joint venture pipeline of 300 MCFGPD and 100 MCFGPD respectively. It is expected that the line to each of the seller's projects will be completed in May, with sales to begin by June 1, 2005.Both operators have indicated that based on the performance of their wells, they would expect to be adding additional wells during the summer and selling additional gas to the joint venture pipeline. The joint venture will pay the sellers 70% of the posted gas price on a month by month basis.Admiral Bay will receive 50% of the gross profit under the joint venture agreement, excluding taxes, compression, dehydration dehydration Method of food preservation in which moisture (primarily water) is removed. Dehydration inhibits the growth of microorganisms and often reduces the bulk of food. and nitrogen removal, if any.Cost of compression and dehydrating is expected to be less than 5% of the total cost of the gas or less than 1% of the gross proceeds.Admiral Bay receives 99% of the posted NYMEX See New York Mercantile Exchange. NYMEX See New York Mercantile Exchange (NYM). price for its gas.Present gas prices have ranged between US$7.00 and US$7.25 At the Shiloh Project, Admiral Bay continues its Development Program with the drilling of six new wells, which began this week. The Company expects to begin selling gas through a new tap facility at the project in early May.Completion of the tap is dependent upon Southern Star's performance on delivering and installing the facility.Southern Star is the main pipeline company in southeastern Kansas.Presently gas sales from the Shiloh Project are severely constrained due to the present purchaser's compression problems and pipe limitations.The project is presently producing 280 to 400 MCFGPD from 16 wells.The new tap facility ties directly into a 400 MMCFGPD line and will allow essentially unlimited sales from the Shiloh Project.When the tap facility is completed, an additional 20 wells, which have been completed and are presently shut-in, will be immediately added.Production is expected to increase to over 1,000 MCFGPD once the change over to the new tap facility is complete and the new wells are connected. At the Devon Project, Admiral Bay has 22 wells currently connected and producing 150 to 160 MCFGPD into the sales line.These wells are primarily coal bed methane wells and are in the process of dewatering Dewatering (dē′wöd·ər·iŋ) is the removal of water from solid material or soil by wet classification, centrifugation, filtration, or similar solid-liquid separation processes. .The Company continues to see an increase in production as these wells continue the dewatering process.An additional 8 wells are presently being connected to the pipeline and sales from these wells will begin by May 1st.Admiral Bay is also in the process of completing an additional 10 wells and expects production from these wells to begin later in May. Admiral Bay Resources Inc. (www.admiralbay.com) is a Canadian listed oil and gas exploration and development company focused on developing its U.S. projects in the Cherokee Basin in southeast Kansas and the Appalachian Basin, in Pennsylvania.Coalbed methane Coalbed methane is a form of natural gas extracted from coal beds. In recent decades it has become an important source of energy in United States, Canada, and other countries. (CBM CBM Commodore Business Machines CBM Coalbed Methane CBM Christoffel Blindenmission CBM Condition Based Maintenance CBM Confidence-Building Measures CBM Curriculum Based Measurement (education) CBM Cubic Meter ) and conventional oil & gas production has begun at the Shiloh, Devon and Quest projects in Kansas and Utah.The Company is listed on the TSX Venture Exchange TSX Venture Exchange Originally called the Canadian Venture Exchange (CDNX), this was a result of the merger of the Vancouver and Alberta stock exchanges. The goal of TSX Venture Exchange is to provide venture companies with effective access to capital while protecting investors. . Statements in this release that are not historical facts are "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995.Readers are cautioned that any such statements are not guarantees of future performance and that actual developments or results may vary materially from those in these "forward-looking statements". 65 Queen Street West, Suite 815, P.O. Box 75 Toronto, Ontario, M5H 2M5 Tel: 416-861-1685 Fax: 416-861-8165 The TSX Venture Exchange does not accept responsibility for the adequacy of this release Admiral Bay Resources Inc. (TSX VENTURE:ADB) |
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