BELLINGHAM, Wash., Nov. 12, 2004 (PRIMEZONE) -- Avalon Gold Corporation (OTCBB:AVGC) announces it has entered into an agreement with Golden Spirit Mining Ltd. (OTCBB:GSML) to sell a 40% working interest in a giant gas field lease in the Uinta Basin, located in the US Rockies, Utah. Upon signing of the agreement, Golden Spirit will issue 1,000,000 common shares 144-Registered as a non-refundable deposit to Avalon. Golden Spirit has a right to acquire the 40% working interest in the gas lease upon Avalon receiving a payment of US$750,000 on or before December 10, 2004. In return, Avalon will issue and deliver 2,000,000 shares of its common stock to Golden Spirit.
The lease area, located in the Uinta Basin, comprises 13,189 acres with a potential 4 TCF recoverable gas and is overpressured by a 0.55 - 0.85 gradient.
According to available data in the area, the prospect property has been delineated using several hundred miles of seismic. The seismic data confirms the thick Emery pay section and shows several sediment wedges in the prospect area. "We feel the data supports a basin-wide deep gas accumulation covering the entire field," states Robert Waters, President of Avalon Gold. This giant gas lease borders other leases owned by EOG Resources Inc. (NYSE:EOG) and EnCana Corp (TSE:ECA.TO; NYSE:ECA).
Major energy companies today recognize that tight gas reservoirs, where geological formations make production complex, and coal-bed methane, where gas is extracted from coal deposits, are two of the more important near term sources to boost North American production of natural gas as demand outstrips supply and drives up prices.
The US Geological Survey estimated (in 1995) basin-center and deep-basin gas resources in the Rocky Mountain Laramide basins to be 250 TCF. The Drunkards Wash Field, just south of the prospect area is estimated to have between 2-4 TCF of recoverable gas. The Jonah Field Overpressured Gas Plain, which is analogous to our prospect area, has similar overpressuring, depth, reservoir rocks and is estimated to be 2.5+ TCF.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical fact are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays in testing and evaluation of products an other risks detailed from time to time in Avalon's filings with the Securities & Exchange Commission.