Vangold Resources Ltd. (TSX-V:VAN)
Suite 1730, 650 West Georgia Street,
P.O.Box 11622, Vancouver, BC, V6B 4N9
Phone 606 684 1974 Fax 604 685 5970
NEWS RELEASE
VANGOLD ENTERS INTO EXCLUSIVE PETROLEUM EXPLORATION PRODUCTION SHARING
AGREEMENT FOR THE EXPLORATION OF 13,775 SQ KMS IN ARMENIA
May 22, 2007 – Vangold Resources Ltd. (`Vangold’) announces that it
will participate in a Production Sharing Agreement (the `PSA’) between
the Ministries of Energy and Environmental Protection of Armenia and
Blackstairs Energy plc (`Blackstairs’). Vangold will participate as
to a 50% interest in Blocks 4, 5 and 6 which cover an area of 13,775
sq. km (over 3.4 million acres) in central and southern Armenia.
Under the PSA, the term of exploration is five years which may be
extended (subject to an agreed work program) by two additional
periods, each of two years. The total financial commitment for five
years is US$2.4M of which Vangold will expend US$1.2M. The Blocks are
governed exclusively by this PSA which was effective as of April 27th
2007.
Dal Brynelsen, President and CEO of Vangold states: `I am very pleased
with this acquisition on two fronts. These particular concessions
encompass half of Armenia and are adjacent to Iran, Azerbaijan and
Georgia, all countries with very extensive oil and gas resources. We
believe a similar potential exists in southern Armenia. We are very
pleased to have aligned ourselves with executive oil and gas experts
from Blackstairs who have extensive exploration and development
experience in both Armenia and in east Africa. We look forward to
working closely with Mr. Sheehan and his crew not only in Armenia but
also in Rwanda and Kenya. The addition of the Armenian basin brings
Vangold’s land package in Africa and Armenia to a total of 45,200 sq
kms.’
Blackstairs Energy Plc
Blackstairs, a private company based in Dublin, Ireland, will operate
the Blocks under the terms of the PSA. An office is being opened in
Yerevan, an experienced General Manager, Mr. Tim Papworth, has been
appointed, and the recruitment of key technical and commercial staff
is underway. Mr. Papworth is a UK-based petroleum exploration
consultant with over thirty years of experience in areas including the
North Sea, onshore UK, Libya, Egypt, Tunisia, Malaysia, Gabon,
Namibia, Georgia and Russia. He has worked intermittently in Armenia
since 1994. The Technical Summary included in this news release was
authored by Mr. Papworth.
The operation in Armenia will also be supported by other members of
the Blackstairs’ team of experienced geological, geophysical and
petroleum engineering staff including the Managing Director of
Blackstairs Mr. Gerard Sheehan, B.Sc., M.Sc., FRAS and Mr. John
D. Scott, B.Sc., M.Sc. Mr. Sheehan is a former Exploration Manager
and New Ventures Manager for Tullow Oil plc. Throughout his nineteen
years with Tullow, Mr. Sheehan worked on a variety of petroleum
projects in Africa, the Indian Subcontinent and Eastern and Central
Europe. Mr. Sheehan resigned from Tullow in July 2006 to concentrate
on the development of Blackstairs. Mr. Sheehan is member of the
Society of Exploration Geophysicists, the American Association of
Petroleum Geologists and a Fellow of the Royal Astronomical Society.
Mr. Scott is a non-executive director of Blackstairs and is a
petroleum engineer with over 35 years experience in the oil sector.
His extensive career includes the position of Petroleum Engineering
Manager for Tullow Oil plc where he assumed responsibility for all of
Tullow’s field development projects in the UK, Syria, Pakistan,
Bangladesh and across Africa. Mr. Scott is a member of the Society of
Petroleum Engineers, the Society of Professional Well Log Analysts and
an Associate of International Petroleum Negotiators.
As reported by Vangold on March 1, 2007, Tullow had announced that its
Kingfisher-1 exploration well in Block 3A in Uganda (50% Tullow : 50%
Heritage Oil) was flowing 13,893 bopd in total. This Ugandan
discovery is part of the Albertine Graben which may extend into
Vangold’s White Elephant concession which is 7,208 sq kms in Rwanda,
not 2,708 as previously announced by Vangold. Vangold is very pleased
that Messrs. Sheehan and Scott will also provide their extensive
expertise to the geological evaluation of this area.
Work Program Armenia
Blackstairs and Vangold will undertake a comprehensive technical
program. The objective of these programs is to elucidate the petroleum
system, high-grade the most prospective areas, and identify prospects
which may be considered for additional delineation or drilling.
The projects identified for the initial phase of exploration are:
Collation and re-assessment of the existing technical database
Reprocessing of suitable geophysical data, including seismic data
Satellite imagery interpretation Gravity surveys Geochemical surveys
Field geological mapping Acquisition of at least 170 km. of 2D
seismic.
Brief Technical Summary of the SE Armenia Licence Area, Blocks 4, 5 &
6
Armenia lies within the Caucasus orogenic belt situated between the
Black and Caspian seas. This orogenic belt was formed as a result of
the closure of a number of Tethyan Ocean tracts, since as long ago as
the Devonian. The remnants of some of these paleo-oceans are
represented in Armenia by up to three narrow, discontinuous belts of
ophiolites, which strike approximately north-west to south-east. The
outcropping ophiolites range in age from Jurassic to Cretaceous. They
do not necessarily represent fully oceanic material, but may instead
be parts of the floors of narrow marine basins similar to the present
Gulf of Suez. These ophiolite belts serve to divide the country into
tectonic zones (see below).
(Geological map of Armenia shown)
The south-western zone is represented by three basins, the
Oktemberyan, Artashat, and Surinaven. They lie along the course of
the present day River Araks, which forms the border with Turkey. They
are referred to collectively as the Ararat Intermontane Depression.
Their sedimentary section is Tertiary in age, which is floored by
ophiolites (Cretaceous / Jurassic) or Paleozoic sediments. These
gas-prone basins lie within Transeuro Energy Block 2, due west of
Block 4, with part of the Surinaven Basin within Block 5.
To the north-east, the section rises onto a regional high composed of
Paleozoic metasediments, before dipping again into a large sedimentary
basin referred to as the Central Depression. These sediments ranging
in age from Permian to Recent. Folding, wrench faulting, and possibly
reverse and thrust faulting, are all recognised structural phenomena
within this zone. Near the north-western end of the Central depression
lies the Aragats volcano, dormant since Pliocene times.
Further north-east, a major tectonic suture occurs within the
Sevan-Shirak zone, and Cretaceous and Jurassic age ophiolites outcrop
within it and along the northern margin. The Sevan-Shirak zone itself
is represented by Middle Eocene tuffs and associated volcanic vents
and intrusives. Finally, in the north of Armenia, the Somkhet Karabakh
and Bazum zones contain Middle Jurassic to Cretaceous sediments
overlying basement. These are deformed by reverse faulting and
thrusting and penetrated by igneous intrusives. The section dips
regionally to the north, into the oil productive Kura Depression of
Georgia and Azerbaijan.
The Central Depression, which covers much the SE Armenia Licence area,
has been subdivided into two tectonic zones – the Yerevan -Ordubad
zone in the north and the Miskham-Zangezur zone in the south (in Block
6). The former is possibly the more prospective, with most exploration
having been carried out in its western part, in the Near Yerevan
Depression in Block 2, where oil prospects occur east of
Yerevan. Similar prospects may exist further east into Block 4,
especially considering that oil shows were seen in the Yeranos
borehole just SW of Lake Sevan.
Based upon gravity data, the Central Depression can be subdivided into
at least seven sub-basins, these being, from west to east – Aragats
Depression, Fontan Depression (potential oil source area in NE Block
2, extending into Bock 5?), Near Year Depression, Sevan Depression (in
central Block 4), Chatma-Vedi Depression (south west of Lake Sevan),
Vardenis Syncline (SE of Lake Sevan) and Vayotsdzor Depression
(central and south Block 5). The prospective area in Block 6 is the
so-called Kapan block in the east, which is Jurassic and Cretaceous in
age.
A summary of oil and gas potential follows:
oil traces found in the Paleocene/Upper Cretaceous of the Azat-1 well
(eight kms from western border of Block 4), and one cubic metre of oil
recovered (several hundred metres of oil shows) from Paleocene in
Shorakhpur-1P well, eight kms further west; extensive oil shows in the
Upper/Middle Eocene of the Garni-1G well (eight kms from western
border of Block 4), and oil found in the Middle Eocene of
Shorakhpur-1P; oil seeps seen in the old Yeranos borehole, SE of Lake
Sevan (Block 4); gas seeps recorded in Lake Sevan and nearby shallow
boreholes (Block 4); gas shows in the Vedi-1T well in the Cretaceous
(western part of Block 5); heavy, waxy, asphaltic residual oil found
within Triassic coals in the Ghermanis-4 borehole, west of
Yeghegnadzor (Block 5); the presence of Permian organic rich, mature,
oil- and gas-prone calcareous shales and mudstones in the general area
(blocks 5, 6); bitumen found in the Shahumian borehole and the
Coniacian of the Spitakjour River area (Block 6), which may be of
Devonian origin, and an unsubstantiated report of an oil show in the
Meghri area, which may also be Devonian (Block 6).
(Map showing oil and gas occurrences in Armenia)
To find out more about Vangold Resources Ltd. please visit our website
at or contact Dal Brynelsen at 604-684-1974 or by email
[email protected].
On Behalf of the Board of
VANGOLD RESOURCES LTD.
`Dal Brynelsen’
Dal Brynelsen, President and CEO
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responsibility for the adequacy or accuracy of the content of this
news release.