Trade Alert: Arkanova Energy Corporation
Affinity Mediaworks Corp. (OTCBB: AKVA)
Trade Alert Arkanova:
AKVA Up Fast at the Open on Strong Volume - Up 10%
Affinity Mediaworks Corp. (OTCBB: AKVA)
Arkanova Energy Corporation (OTCBB: AKVA) is a junior producing oil and gas company also engaged in the acquisition, exploration and development of prospective oil and gas properties in the United States.
• Arkansas: Working interest in Fayetteville Shale
• Colorado: United States mineral leases in Delores County, Lone Mesa State Park
• Montana: Leasehold interests in Pondera and Glacier Counties
Arkanova intends to acquire additional oil and gas property interests in the future. Growth is anticipated to occur through the exploration and development of existing properties and through the acquisition of additional oil and gas properties following extensive due diligence
Potential exists to participate in collaborative agreements and joint ventures in order to share expertise and reduce operating costs with other experts in the oil and gas industry.
Analysis of new property interests will be undertaken by or under the supervision of management and board of directors.
Four Pronged Approach
Andarko is continuing efforts to bring more wells on line through recompletion and reactivation of existing wells. Arkanova’s company strategy encompasses a four-pronged approach:
• To develop the Fayetteville Shale and conventional gas targets on its Arkansas Prospect
• To re-enter and complete the Grove East Prospect in the Paradox Basin in Colorado
• To develop and enlarge production in the Cut Bank oil field in Montana
• To seek out new properties and partners in addition to increasing its acreage position
Proved Oil and Gas Reserve Quantities : September 30. 2009, 277,886 million barrels
Current Production
Andarko is currently producing approximately 2,000 barrels per month with the intent to increase this production to over 5,000 barrels per month assuming satisfactory drill results for the scheduled 2010 drill program.
Montana Workinf Interest with 21 Producing Wells
 Arkanova acquired a 100% working interest in approximately 10,000 gross mineral acres in the Two Medicine Cut Bank Sand Unit located in Pondera and Glacier Counties, Montana, together with the equipment, parts, machinery, fixtures and improvements located on, or used in connection with, the Two Medicine Cut Bank Sand Unit.
Ownership of these leasehold interests granted Arkanova the right to develop and produce all of the oil and gas reserves under the Unit.
The Unit covers approximately 9,900 acres and is located at the far southern end of the Cut Bank Field; it is part of the Blackfeet Indian Reservation. Since the establishment of the Unit in 1959, there have been 82 wells drilled on the Unit and there are currently 21 wells producing oil from the Unit. This has increased from 12 wells that were producing in October 2008, at the time Andarko acquired the property interests.
All of the 9,900 acres on the Montana unit are considered to be developed and developmental acreage. Provident Energy, a wholly owned subsidiary, is currently working with Schlumberger to develop infield vertical and  horizontal drilling locations. The property has 80 acre spacing with the potential for 40 acre to 20 acre spacing allowing for a minimum of 80 infield drilling locations. The property also has the potential for 30 Bakken type horizontal wells based on 320 acre spacing.
Arkanova intends to make an application and file the necessary permits with the various regulatory agencies in order to drill a well on Montana lease to explore the Bakken type shale in the second quarter of fiscal 2010.
Security deposits have been paid in relation the Montana property to secure the bonding requirements of the Montana Board of Oil & Gas, the Bureau of Indian Affairs and the U.S. Environmental Protection Agency.
Arkansas Working Interest
Arkanova has acquired a 100% working interest in approximately 43,500 gross mineral acres in the Fayetteville Shale play located in Phillips and Monroe Counties of Arkansas. Pursuant to the terms of an oil and gas lease acquisition and development agreement dated July 24, 2006, Andarko acquired or is in the process of acquiring, leases of mineral rights in approximately 50,000 acres of prospective oil and gas lands located in Phillips and Monroe Counties, Arkansas.
All of the Arkansas 45,482 acres are undeveloped. All leases have terms of 5 years, the oldest being November 2006. Management also plans to focus on the exploration and development of property interests in the Phillips and Monroe Counties, Arkansas and Lone Mesa State Park in Colorado.
The first well, the DB Griffin #1-33, was drilled to a total depth of 7,732 feet on November 29, 2007, and has been evaluated. It is Andarko’s intent to re-enter and drill the Griffin 1-33 to the Devonian in 2010, if it warrants re-entry.
Colorado Working Interest
Arkanova has acquired a 100% working interest in approximately 1,320 gross mineral acres in the Paradox Basin located in southwest Colorado. The initial term of the leases is for seven years, and continues thereafter so long as oil or gas is being produced from the lease areas in paying quantities. Arkanova anticipates a 100% working interest in the property and an approximate combined net royalty of 83.25%, with the remaining royalty interest to the lessors.
In connection with the acquisition of the lease from The Curtis Jones Family Trust, a third-party a 3.5% overriding royalty on 220 net mineral acres exists. The exploration targets on this prospect include a series of fractured black shales of the Pennsylvanian age Paradox Formation with drilling depths of 8,000 feet to 9,500 feet. The target intervals were already encountered in a well located on the leasehold, which was drilled for deeper oil targets and then was plugged in a time when gas was uneconomic due to price.
In the 100 foot thick main target interval, the gas show while drilling was reported to be 14,000 units of C1 (28,000+ units by chromatograph) and pressure was calculated at approximately 4,600 psi. Permission is being requested from the State of Colorado to re-enter and complete this bypassed gas pay.
Management is planning to farm out this prospect in 2010 if commercially productive. The sale of this property is being considered.
Delivery Commitments
There are no contracts obligating Andarko to provide a fixed quantity of oil and gas to any party. A contract exits with CHS Inc. that provides for their taking all oil and/or condensate production from the unit unless either party give 30 days advance written notice to terminate the agreement.
Estimated Timeline of Exploration Activity on Property
• June, 2010 – Commence drilling Montana well and complete in the CutBank or Bakken type formation, if warranted
• July, 2010 – Commence drilling second Bakken well if warranted
• August, 2010- Commence drilling third Bakken well if warranted
Management
Pierre Mulacek—President and CEO, Arkanova Energy Corp.
Pierre Mulacek is the President and CEO of Arkanova Energy Corp. He leads the company with more than twenty years of experience in various facets of the energy industry. Prior to Arkanova Energy, he served as Vice President of Petroleum Independent Exploration Corp. and was one of the original founders of InterOil Corp. He attended Texas Tech University from 1979 to 1983 with a focus on Petroleum Land Management.
Erich Hofer—Director, Arkanova Energy Corp.
Erich Hofer is a director of Arkanova Energy Corp. He leads business development for the company and has been instrumental in securing the company’s largest project acquisition to date. Mr. Hofer brings over fifteen years of international financial and management expertise to the company. He served eight years in a CFO capacity as well as various executive management leadership roles in several industrial companies in Switzerland. He holds an MBA from the University of Chicago (2004) and a B.S. in Economics and Management from the University for Applied Science for Business and Administration in Zurich (1993). He is also a Certified Management Accountant in Switzerland.
Reginald Denny—CFO, Arkanova Energy Corp.
Reginald Denny is the CFO of Arkanova Energy Corp. He has more than twenty-five years of experience in the energy industry including his service in CFO, controller and senior management roles. Mr. Denny also has SEC reporting and Sarbanes-Oxley compliance experience. He was the CFO to Tesmec, USA, an oil and gas services company, for over thirteen years and has been an independent accounting consultant since 2006. Mr. Denny received a B.B.A. in Accounting with a minor in Finance from the University of Houston 1973 and is a registered Certified Public Accountant in Texas.
Lance Nelson—Field Manager, Arkanova Energy Corp.
Lance Nelson is the Field Manager of the Two Medicine Cut Bank Sand Unit in Montana. He has over fifteen years experience in the oil and gas industry. Mr. Nelson brings eight years of drilling and completions knowledge from his work throughout the Gulf Coast and Rocky Mountain regions including Montana. In addition, he has spent the other half of his career working on exploration and development projects in Brazil, Qatar, UK, and Australia. He holds a B.S. in Chemical Engineering from South Dakota School of Mines & Technology (1995).
Arkanova Energy Corp. (OTC: AKVA)
2441 High Timbers Drive
Suite 120
The Woodlands, TX 77380
United States – Map
Phone: 281-298-9555
Fax: 281-298-9558
Web Site: http://www.arkanovaenergy.com
About Arkanova Energy Corporation
Arkanova Energy Corporation is a U.S. based oil and gas exploration and development company. Arkanova’s primary assets consist of various oil and natural gas leases and related interests in oil and natural gas properties including working interests in Arkansas, Colorado and Montana.
Forward-Looking Statements
Except for statements of historical fact, the information presented herein constitutes forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to acquire and develop specific projects, the ability to fund operations and other factors over which Arkanova Energy Corporation has little or no control.
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