VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 5, 2014) - Bayhorse Silver Inc. ("Bayhorse" or the "Company") (TSX VENTURE:BHS), has entered into an Farm In Agreement ( the "Agreement") with Saturn Minerals Inc ("Saturn") whereby it can earn 50% of Saturn's interest in the 230,000 acre Little Swan ("LS") oil and gas prospect in Saskatchewan's "Northern Williston Basin". This region is one of the last highly accessible, on-shore frontier areas of North America for oil & gas.
The Williston Basin is now generating over 1,000,000 barrels of light crude oil per day, and is projected to grow to 2,000,000 barrels a day as more oil wells are drilled. Saturn estimates that, based on the seismic knowledge gained to date, oil bearing systems may be found as deep as 1,200 meters. Drilling to that depth is estimated to cost $500,000 per vertical well, and neither fracking nor horizontal well development is anticipated.
Commenting on the potential economic model of an economic discovery in this part of the Williston Basin, Stan Szary, CEO of Saturn stated that "Due to the much lower costs of drilling a vertical well and other associated benefits the netbacks on production from this area, based on a successful exploration program, would be much higher than from deeper non conventional wells which require horizontal drilling and fracking." He added that "the royalties applied to new discoveries in this area are extremely favorable which would also enhance netbacks from a successful program. The current strength of the US dollar against the Canadian dollar certainly enhances the economic model for this area," concluded Szary.
The Northern Williston Basin contains many of the same oil bearing formations that are located in the central and southern parts of the basin which are found in North Dakota and Montana, and since 2010, have been shown to host high TOC, oil-prone source rock, excellent reservoir rock and widespread cap rock of high integrity.
Saturn believes that the recent seismic interpretation on its nearby Bannock property compares directly to the analogous fault bounded "Tyvan" Oil pools which produce from the Red River (Yeoman) and Winnipeg Sands to the south in the same stratigraphic basin. Saturn has conducted a 1,600 line-km aerial gravity survey with 300 meter spacing on Little Swan lands that showed basement structures exceeding 1,000 meters. These are considered significant as they identify both structural traps for the Red River and stratigraphic traps against the basement faults and highs for the Winnipeg and Deadwood formations.
Additional seismic data acquired in 2013 and 2014, which is used to determine depth and orientation of rock formations to identify most likely depths for drilling exploration wells, have identified several basement structures on Little Swan lands. The Red River formation in the property areas contains an ideal reservoir, up to 75 meters thick, with excellent porosity up to 20% dolomite that Saturn management believes has excellent potential.
The Tyvan oil pool has produced over 2.8 million barrels of light sweet 43-degree-API oil since 1998 from 21 wells, with an average pay zone of approximately 65 feet. The individual wells at Tyvan are producing up to 140 barrels of oil per day with estimated accumulations of up to 170,000 barrels per well (Geoscout, 2014).
See Saturn's presentation at https://www.youtube.com/watch?v=VEpPtr4JsWo.
The terms for the Farm In Agreement to acquire 50% of Saturn's oil and gas rights on the LS property is based on the following terms:
A $50,000 non-refundable deposit towards an equalization payment of $600,000, payable as to $150,000 on approval of the TSX Venture Exchange (TSX-V), $200,000 on or before 90 days after Exchange approval and $200,000 on or before 180 days after Exchange approval. Assume $230,000 of Saturn's cost of the planned 2014-1015 seismic program, payable on or before January 30, 2015 and issue 500,000 shares of BHS to Saturn.
Other than lands converted by drilling into an oil lease, the Company must participate as to 25% of all ongoing geological or geophysical expenditures on the Farm-in Lands or forfeit its interest.
Graeme O'Neill, the Company's President and CEO comments, "With this acquisition the Company now has three sources of potential near term revenue. Production from the Bayhose silver mine, the 30% NPI in the Flagstaff barite mine, and now the potential for development of the Little Swan oil lands in the Williston Basin."
Bayhorse Silver Inc. is a junior exploration company that is earning an 80% interest in its newly acquired historic Bayhorse Silver Mine that has the potential for a substantial silver discovery. It has a 100% interest in its three major high grade New Zealand gold prospects (Alexander River, Paparoa and Red Queen), in the highly prolific West Coast South Island gold fields of New Zealand, which offers investors the potential for a major gold discovery.
The Company has a 30% Net Profit Interest in the Flagstaff barite mine in Washington State, where work is currently in progress. The majority of barite production is used in drilling oil and gas wells. The Company has an experienced management and technical team with extensive exploration expertise. This News Release has been prepared on behalf of the Bayhorse Silver Inc. Board of Directors, which accepts full responsibility for its contents.
On Behalf of the Board
Graeme O'Neill, President
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.