SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
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Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported)
November 14, 1997
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Geo Petroleum, Inc.
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(Exact name of registrant as specified in its charter)
California 0-20915 33-0328958
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(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
501 Deep Valley Drive, Suite 300
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Rolling Hills Estates, CA 90274
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
310-265-0721
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(Former name or former address, if changed since last report.)
Geo Petroleum, Inc.
Item 5 Other Events
Geo Petroleum, Inc. Increases Heavy Oil Reserves 100%, Reports
3rd Quarter Profit
Rolling Hills Estates, CA, November 17, 1997: Geo
Petroleum, Inc. (Symbol: GOPL), an independent oil and gas
company specializing in high technology energy development, with
offices in Rolling Hills Estates, California, and Tulsa,
Oklahoma, today announced a 100% increase in its proven heavy
oil reserves as the result of an agreement with a subsidiary of
Saba Petroleum Company (Symbol: SAB). Geo has increased its
share, from one-third to two-thirds, of the Vaca Tar Sand oil
reserves on Geo's leases in the Oxnard Oil Field, Ventura
County, California. Geo's share of proven reserves is now an
estimated 55,200,000 net barrels of heavy oil recoverable by use
of the Steam Assisted Gravity Drainage ("SAGD") method, based on
the report of an independent engineer. The SAGD oil recovery
rate from the reservoir is estimated at 50%, compared to the 15%
- - 25% recovery rate from conventional methods.
Geo and Saba will share equally in the cost of development
until Saba has spent $5,000,000. Thereafter, Saba will pay one-
third of the costs and receive one-third of the revenues, and
Geo will pay two-thirds of the costs and receive two-thirds of
the revenues. As to the wells for which Saba has paid a
disproportionately higher share of the costs, Saba can recover
its costs out of one-half of production revenues, after which
its interest in these wells will be reduced to one-third. In
order to finance its share of the development costs, Geo plans
to obtain financing through a private placement.
The SAGD method utilizes a high technology process
developed in Canada to drill twinned horizontal wells through as
much as 2,600 feet of oil pay sand. Steam is continuously
injected at high pressures and temperatures into the upper well
to mobilize the heavy oil, which then gravitates to the lower
well and flows to the surface at rates of up to 1,300 barrels of
oil per day.
Larry R. Burroughs will direct the development of the Vaca
Tar Sand for Geo and Saba. Mr. Burroughs has been elected
President, Chief Operating Officer, and a Director of Geo,
following his resignation as President of Saba Petroleum, Inc.
Gerald T. Raydon has been elected Chief Executive Officer and
will continue as Chairman of the Board. Eric J. Raydon has been
elected Vice President.
Geo also announced that it recorded a profit of $324,820,
or four cents per share, for the quarter ending September 30,
1997 on revenues of $571,533, versus a loss of $20,570 on
revenues of $385,144 in the comparable 1996 period. The profit
was due to expansion of the Company's industrial waste disposal
business, implementation of an aggressive cost-cutting program,
and the successful conclusion of a lawsuit against a negligent
contractor. Operating expenses declined to $106,038 in the 1997
period, from $213,086 in 1996. General and administrative
expense increased to $84,090 in 1997 from $65,682 in 1996.
Interest expense declined to $18,798 in 1997 from $77,825 in
1996.
Safe Harbor for Forward-Looking Statements: Except for
historical information contained herein, the statements in this
news release are forward-looking statements that are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements
involve known and unknown risks and uncertainties that may cause
the Company's actual results in the future periods to differ
materially from forecasted results. These risks and
uncertainties include, among things, volatility of oil prices,
product demand, market competition, risk inherent in the
Company's international operations, imprecision of reserve
estimates and the Company's ability to replace and expand oil
and gas reserves. These and other risks are described in the
Company's Annual Report on Form 10KSB and other filings with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
Geo Petroleum, Inc.
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Registrant
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/s/ GERALD T. RAYDON
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GERALD T. RAYDON
(CHAIRMAN AND CHIEF EXECUTIVE OFFICER)