Sebastian River Holdings Inc.'s Oil and Gas Update
Shareholders, in efforts to ensure that the company is both transparent and accessible, please note that we’ll be updating you regularly via the website, newsletters and emails that inform you in detail, of project specifics that relate directly to your investment in our company. We thank you for your faith, support and, if anything else, your continued speculation, as it is our goal to ensure that every penny raised is put back into building a company that is fundamentally strong with verifiable assets that produce an irrefutable return on investment.
On that note, we are pleased to announce that Sebastian River Holdings has provided initial funds for the Master Lease in the recently announced Joint Venture. The lease is located in Venango County in the Cranberry Township of Pennsylvania. There are a total of 50 wells on the lease spread across 457 acres and we are currently reworking a block of 10 wells, to start, toward near-term production. Once the 10 wells are reworked, we will begin immediately on additional wells.
Each well costs approximately $10,000 to rework.. It will cost approximately $70,000 to drill each new well. We have found that a pairing with Drake Gold Resources Inc. on this endeavor will provide a win-win for both companies toward near-term revenues, long-term growth and shareholder value. The entire lease will require a total investment of $500,000. We are beginning with a block of 10 wells that will ensure that we are not taking on too much too fast. The capital necessary to complete the purchase of the lease with title ownership will be secured from production revenues. This amount is approximately $45,000.
Full details of the agreement for the lease can be found at: http://q.b5z.net/i/u/10073722/f/Drake-FT-fina...9-2012.pdf
In summation, once the former lease owner is paid as agreed from the 50% working interest, title to the lease will go to the Joint Venture with each company receiving a percentage, pro rata, based on capital expenditures. From there, the JV will receive 100% working interest subject to a 3 year overriding royalty to the former lease owner. Until that point, our joint 50% working interest will be reinvested into the lease.
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