Cougar O&G provided an operations update to the previously announced Q1, 2011 Trout core area multi-well drilling program and 3D seismic program.
The previously announced 23.8Km(2) high resolution 3D seismic program is well underway with slashing and mulching mostly complete. The survey crew has mobilized to the project area and will begin surveying the source and receiver lines today. The seismic drill crews will arrive midweek and begin working on the source lines. The average temperature since the project started is approximately is -30 degrees Celsius, however the work is progressing well using industry "best practices" to prevent any safety or environmental concerns. The project is currently ahead of schedule and will have all field work completed by the end of January. Regular progress updates will be provided. This seismic data will provide the Corporation with the detailed geophysical information needed to support the geological selection of the drilling programs which will be executed over the next 18 to 24 months.
The previously announced multi-well drilling program continues on schedule with final permitting underway. The Corporation anticipates receiving the drilling licenses by the end of January. Upon reaching that milestone lease construction field work will be started. The lease construction of the planned development wells will utilize existing infrastructure including access roads, leases, pipelines and power. This will allow the Corporation to minimize the overall project "foot print," reducing the construction costs and shortening the time to tie in the wells and begin production. It is anticipated the drilling rig will mobilize to the project area by the middle of February, 2011.
Cougar also completed the first well in the previously announced reactivation program in the Trout core area. A service rig deepened the 10-21 well to test additional lower Keg River oil formations. Oil was seen on the initial swab test and the well has been put on production. The service rig has moved to the second well in the program. The two wells which will be deepened have been suspended for several years but are tied in with pipelines to the main Cougar production facility. The additional lower Keg River oil formation was identified through detailed analysis of the reprocessed 3D seismic acquired in September 2010 and has the potential to add additional reserves, production and cash flow.
Cougar has secured initial funding for the drilling program through the exercise of existing Cougar warrants and a $3 million credit facility with current commercial terms. Additional information will be provided upon closing.
Mr. William Tighe, CEO and Chairman of the Board for Cougar stated, 'We are very excited as the Trout 3D seismic program field work continues with the line clearing crews doing an excellent job over the last week. With the drilling crews arriving this week and the recording crews expected to arrive next week the program is on pace to finish ahead of schedule. The anticipated success of the seismic, drilling and production projects will allow Cougar to continue towards the previously stated corporate production objective of 2000 bbl/d."
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