Abby, Inc. Executes An Option To Acquire Up To A 75% Working Interest In Oil Wells
Abby, Inc (OTCBB: ABBYD) options entire oil field in Richardson County, NE, signs and purchases option on first parcel with two wells planned for late December drilling.
November 7, 2012 (Newswire.com) - Abby, Inc. (OTCBB: ABBYD) acquired an option from Black Star 231 Corporation to purchase up to a 75% working interest in a two well oil drilling program known as the "Rose Dome Program". The purchase price for the option was $15,000. The oil and gas leaseholds are located in Richardson County, Nebraska.
The Agreement calls for Abby, Inc. to purchase up to 3 of 4 Participation Units in the Rose Dome Prospect, which if all the Units are purchased, would give Abby, Inc. a 75% stake in the oil wells. Two wells are planned initially. The Operator, Black Star 231 Corp., will be purchasing one Unit.
Abby, Inc. may extend the option period until February 24, 2013 by making an additional $80,000 non-refundable deposit to Black Star on or before December 24, 2012. Neither the $15,000 nor $80,000 payment shall be credited to Abby in order to participate in the Rose Dome Program.
The first cash call will be for $138,650 per Unit. If Abby, Inc. chooses to acquire its 75% working interest the first cash call will total $415,950.
If both wells are completed for production there will be a second cash call of $133,500 per Unit or $400,500 for Abby, Inc. to retain its 75% working interest. For each well not completed for production in this drilling program the second call amount is reduced by $66,775 per Unit of participation.
Abby does not currently have sufficient funds to acquire a 25% working interest which represents the minimum number of units which can be purchased by Abby.
In addition to participation in the two well drilling program, Abby has been given the option to participate in other drilling programs on five adjoining parcels. Non-refundable fees to exercise these options total $5,000 for each drilling program and payments are required in November and December 2012. The entire group of parcels comprise 2100 acres.
The Rose Dome project is located within the State Line Prospect and is 3 miles south of the Dawson oil field and 10 miles north of the McClain oil field, both of which lie along parallel faults that extend between the two producing oil fields. The Dawson field has produced 2,000,000 barrels of oil, and the McClain oil field, which has produced 3,500,000 barrels of oil. The State Line prospect holds the potential for a similar multi-million barrel discovery, based on the independent geologist who prepared the initial report for the lease holder, Black Star 231 Corporation.
In that geological report, the geologist noted that, "The State Line prospect is bounded on the north by a normal fault with 70 feet or more of vertical offset, and is bounded on the east by a north-south normal fault with 150 feet or more of vertical offset. The north-south fault is uplifted on its west side forming the east limit of an anticlinal axis, creating a classic oil trap."
Black Star 231 Corp. outlined the fact that there are three existing oil wells on the West side of the State Line field in its geological report; one on the Northwest side, which was last operated in 1933 and two on the Southwest side that are currently producing approximately 20 bbls per day.
"We believe that the existence of producing oil wells bordering the six parcels we may option is a strong indication of productive ground," said Abby, Inc. President Tom Forzani.
Mr. Forzani went on to say that, "Our focus is to work with seasoned oil operators that can provide low-risk prospects, like the State Line field. We believe that Black Star 231 Corporation meets our criteria of experience and that they will be a strong partner for the Rose Dome parcel and other properties."
About Abby, Inc.
Abby, Inc. (OTCBB: ABBYD) is an oil and gas exploration and development company focused on developing partnerships with experienced oil & gas operators throughout the United States and Canada to identify low-risk prospects to explore and develop into producing properties.
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