Canterbury Basin Seismic Completed

Processing and interpretation of the third stage of seismic exploration in the onshore Canterbury Basin in New Zealand is now complete, according to AMG Oil Ltd. The program was to further detail drilling locations for both the Arcadia and Ealing Prospects. Drilling of Arcadia-1 and Ealing-1 is anticipated to commence in late August 2000.

"The results of this seismic program have further highlighted the potential for large accumulations of oil or gas in the Arcadia and Ealing Prospects" stated Cameron Fink, President of AMG Oil Ltd. "In addition, several other large structures and leads have also been identified. This provides a number of future exploration opportunities of similar magnitude to the Arcadia and Ealing Prospects."

The Arcadia Prospect is situated in the north of the permit area, adjacent to the Rangiora Trough, where sedimentary rocks are buried at sufficient depth to provide oil and/or gas to charge the Arcadia structure. The Arcadia structure is a pop-up anticline of geological type similar to structures in Californian basins, many of which have held major oil fields.

In the south of the permit area, the Ealing Prospect has been mapped as a potential trap over an area of about 15,000 acres. Due to its greater separation from the Alpine Fault (New Zealand's analog to California's San Andreas Fault) it has not been subject to the same degree of structuring as Arcadia. However, its expansive area and likely good quality reservoir development in the Homebush Sandstone Formation, combined with the evidence of hydrocarbon gas flags adjacent to the main fault that bounds the Ealing structure, make it a desirable exploration target.

AMG Oil Ltd. currently holds a 30% interest in the 2.6 million-acre permit with an option until June 25, 2000 to increase its interest to 80% by funding the drilling cost of the Arcadia-1 and Ealing-1 wells. The cost of this program is estimated to be US$1.7 million.

Edited by Dev George