Plans are underway to assemble an exploration joint venture program next year to drill several test wells on these properties. The Triangle zone in the southwest Alberta foothills belt is considered a new regional gas play and the company is a participant with good acreage representation. The company will announce further details once the exploration program for 2004 has been finalized.
In other company news, the most recent joint venture includes providing financing to earn an interest in the Karr property in northwest Alberta by paying 10% of re-completion costs of a cased gas well to earn 8% bpo and 4% apo. The well 8-24-63-3W6 was originally drilled, tested and cased in 1999 and based on drill stem tests during a 2 day period the well flowed 3000 mcf/d and 1750 barrels of oil (condensate) per day. However in order to validate the Crown lease the well must prove economic viability. At the present time a rig is on the well site and preliminary results are positive but not yet conclusive.
inal results will be available within the next month. This deal involves earning 2 sections, one with the 8-24 gas well and the other, an offset section with a well containing the same gas pay zones that tested 960 mcf/d and 132 barrels oil per day. The joint venture earns 60% of the offset section.
Next year the offset borehole could be re-drilled horizontally to maximize recoveries There is good potential to develop a new gas pool and if new testing in 8-24 confirms the original tests, very significant value will have been proven.
The company has an interest in a gas well producing 2200 mcf/d from a Devonian gas pay zone that has indicated minimal decline during the last 4 years. Moreover the company has additional interests in 6720 net acres in 10.5 contiguous sections of land in Township 38 Range 9W5 in the Strachan area which is geologically prospective for Devonian Reefs that are found to contain the most prolific gas reserves in the Alberta sedimentary basin. Some Devonian wells with reef pay zones in the deep basin near Strachan can flow up to 100 million cubic feet per day with ultimate recoveries of 200-400 billion cubic feet per well.
Based on geological and engineering data with exhaustive 3D seismic interpretations, several "Reef" anomalies have been well defined for exploration drilling in the 10.5 section block of land at Strachan. The company has representation in all of the leases containing the prospective drill locations. It is anticipated that at least one test well will be drilled next year.
The company recently participated as a joint venture partner to earn an interest in a property containing a cased well in 6-31-20-3W5 with gas potential at Turner Valley. Original well log surveys and drill sample cuttings indicate two untested gas pay zones at a depth of 3000 meters. Based on expert appraisals a re-completion program was prepared and a service rig was moved on location in October, 2003. To date operations are currently suspended at the well site after carrying out the first stage of the re-completion program. Original packers installed by previous operators were removed and the borehole was conditioned in order to run well log surveys. A neutron log was run over the two potential gas zones and the survey results confirmed gas pay in both sands.
Another cement bond log was also run which indicated poor cement isolation above and below the gas sands. As a consequence, no confirmed gas testing was carried out until a cement squeeze program is carried out to prevent inflow from other sources. This will be done in the first quarter 2004.
It is anticipated that the key well in 6-30-20-3W5 is a new gas pool discovery. The company and partners have options on a minimum of 2 sections and a maximum 7 offsetting sections with additional available Crown leases. After the gas pay zones are confirmed by perforations and frac. stimulation early next year, exploration plans will be put in place to aggressively drill and develop a new gas pool.
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