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Drilling program in line with expectations

As of September 25, Ginger Oil has drilled seven wells in 2009. One productive well in Jackson County, Texas was completed in June; one productive well in Newaygo County, Michigan, and two productive wells in Ouachita County Arkansas, are all waiting on completion, which should occur within the next month. Three exploratory wells in Arkansas are determined as dry holes.

The company today has two wells prepared for drilling, both waiting for drilling equipment. Ginger Oil has plans to drill three additional wells, making the 2009 program a total of twelve.

- If our plan for 2009 is fully realized, Ginger Oil will reach a total of twelve wells drilled and completed. Such drilling activity surpasses our highest previous annual drilling. In 2008, we reached eight wells and in 2007, we reached nine wells, says Don Neville, President of Ginger Oil Inc. Moreover, it is notable that Ginger Oils average revenue interests in this year’s prospects have increased substantially compared to any previous year.

- The ratio between productive wells and dry holes are very much in line with our expectations. Out of ten prospective drillings, Ginger Oil has a history of achieving around 6 productive wells, says Magnus Stuart, CEO of Ginger Oil AB.

A detailed update on the drilling program 2009 will be presented in the company’s nine month report which is due to be published at 9 am on October 27th.

Read our press release for more information.

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Disposition of Jackson County oil field

On Sept 14, 2009 Ginger Oil Company received $2,250,000 through the sale of half of it’s interest in the South LaWard Field, Jackson Co Texas.

In February 2008, the company acquired, the, Top of the Hill prospect and has since invested a total of $630,000. The sell price corresponds to $30 per barrel, based on the company’s P1 reserves. The company has realized a capital gain through this divestiture of $1,900,000. However, the company has significant tax loss carry forwards and this transaction will not be burdened by federal income tax.

Through this divestiture Ginger Oil has increased liquidity that will be used to acquire new oil and gas prospects and to finance future drilling program.

Ginger Oil’s net revenue interest at South LaWard Field after the divestiture is 8.05%.

“Ginger Oil is changing the strategy in long term ownership in proved reserves. The company will evaluate the possibility to divest portions in proved projects when prices and terms are attractive. Ginger Oil’s strength lies in finding oil and gas reserves. The Top of the Hill prospect represents an example of a very successful project. The internal rate of return on this prospect is 230%. Through divestiture of less than one percent of its 17.8 million barrels of P2 reserves, the company shows ability to realize profits and release capital, says Hans Blixt, CEO Ginger Oil Inc.

Read our press release for more information.

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Annual General Meeting rescheduled. New date set at June 16th, 2009

The company has decided to reschedule its Annual General Meeting by advancing it nine weeks forward. The Annual General Meeting will be held on Tuesday June 16th, 2009. This new date replaces earlier published date of April 15th 2009 with immediate effect.

Read our press release for more information.

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Third party audit confirms increase of reserves

During the month of January 2009, an audit of Ginger Oil reserves has been made by the Houston based company, Ralph E. Davies & Associates. The audit shows that proved reserves have decreased to 379,000 bbl and probable reserves increased to 17,478,000 bbl.

Every year, Ginger Oil conducts an audit of the company’s oil and gas reserves. This year’s revision has been made by Ralph E. Davis & Associates, Houston Texas, during the month of January 2009. It is commissioned by Ginger Oil to cover all its oil and gas assets, which are located in the states of Arkansas, Louisiana, Michigan and Texas.

The audit shows that reserves at year end 2008 (year end 2007 figures in brackets) are: Proved Reserves (P1) – 379,000 bbls (2007: 963,000 bbls). Probable Reserves - 17,478,000 bbls (2007: 7,560,000 bbls). In summary, the company holds P2 Reserves of 17,857,000 bbls (8,523,000 bbls). Ginger Oil does not publish Possible Reserves or P3 as a company policy.

- We are pleased to get confirmation of the increase in Probable Reserves. The revision shows that the prospect, Tiger Creek, Louisiana and also our latest prospect in Willisville, Arkansas carries very strong potential. The decrease in Proved Reserves is dependent both on current low prices of oil and gas, and on the outcome of recent development drillings, says Hans Blixt, CEO of Ginger Oil Inc.

Read our press release for more information.

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