Perth, Oct 4, 2006 AEST (ABN Newswire) - Alto Energy International Limited (ASX: AOI) is pleased to announce the appointment of Mr James M Trimble as Managing Director and Chief Executive Officer. Mr Trimble is based in Houston and has been a Director of the company since February 2006. The appointment signals a new focus on further capitalising on new opportunities in the US, particularly in traditional onshore oil and gas prospects.
Mr Trimble is a registered professional engineer with over 30 years US and international oil and gas experience specialising in engineering, operations, exploration, management, acquisitions, divestitures and corporate restructuring.
Alto Chairman Mr Tony Grist said Mr Trimble had already made a significant contribution to the Alto Board.
"We are delighted he has agreed to lead the company in our ambition to develop a significant oil and gas business in the United States. Alto is implementing a new strategy and reinvigorating its exploration portfolio and Mr Trimble is well placed to guide the company through this next phase." Mr Trimble served as an executive of the Cabot Oil and Gas Company for most of his career.
"His knowledge and contacts in the US oil and gas industry will be invaluable," Mr Grist said. As part of the company's new approach, Alto will acquire a 12.5% interest in leases held by a private US company, Foothills Energy LLC, in which Mr Trimble has been involved and which has exploration and production leases in the Arkoma Basin, Oklahoma.
Alto has agreed to acquire this interest from Mr Trimble for 21 million shares in Alto Energy International Limited, subject to shareholder approval. The company is undertaking due diligence on the leases and will provide full details on completion of experts' reports.
Mr Trimble will be offered five million options exercisable at A$0.06 cents before 30 September, 2009 and vesting on 30 September, 2007 as part of his remuneration contract and subject to shareholder approval.
Mr Greg Channon has resigned as Managing Director and the Board is appreciative of his efforts in guiding the company from its initial projects through listing on the ASX.
The Foothills Joint Venture Project has natural gas assets and production and development potential in LeFlore County, Oklahoma. Alto will have a 1/8 th interest in the Foothills Energy LLC lease position in 18 sections of land for more than 3,000 acres gross or about 300 net acres, plus a like interest in an Option Potential in 3,178 acres adjacent to the sections of land in the acquisition of a Participation Agreement from Grand Gulf Energy Company LLC.
Alto via Foothills will participate in the 24 square mile 3D seismic program in LeFlore County currently being acquired in joint venture with BP. The 3D seismic is expected to identify as many as 22 locations to be drilled on this acreage during 2007, 2008 and 2009 and Alto will have a 6.5% interest. Alto anticipates being able to drill up to 22 locations given Oklahoma's forced pooling rules.
The acquisition includes three wells that have been drilled, which hold 1600 gross acres and are producing 650 mcf gross (40 mcf net) per day. Alto has evaluated the three existing wells and determined they were not fully frac'd and that offset wells will perform considerably better. Alto has also determined the 3D seismic will allow much more precise locations to be drilled which will optimize flow rates and reserves.
In addition to these three existing wells, there are a number of offset locations that have been generated by the first three wells. BP's experience in adjacent acreage to the southwest is that they have found they were able to use 3D to pick the sweet spot drilling locations with multiple potential horizons (Brazil, Spiro, Red Oak, Wapanucka, Cromwell, Woodford Shale, Hunton and Viola).
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