Vaquero Energy has made its fifth Nisku oil pool discovery in the Pembina area of west central Alberta, Canada. Preliminary results from the exploratory well drilled at 7-34-49-8W5M
indicate the presence of hydrocarbons in the Nisku formation comparable to those encountered in the Company's two off-setting Nisku oil pools. The 7-34 well was drilled based upon the Company's interpretation of its 3D seismic over the subject lands. Completion and testing of the discovery well is planned to commence later in the first quarter of 2004. Pending test results, Vaquero will tie-in the well to the Company's existing oil handling facility at 11-14-50-8W5M and evaluate its off-setting undeveloped acreage for further pool development.
Vaquero has a 100% interest in the 7-34 well reverting to 50% after payout (including recovery of non-participation penalties from an industry partner). The discovery well will benefit from a royalty free production period granted new oil pool discoveries in Alberta.
Based upon its successful drilling in the Pembina area Vaquero will be active during the remainder of 2004 developing recent discoveries, expanding pipeline and oil handling infra-structure and continuing to explore for new Nisku oil pools on its extensive undeveloped land base
in the Pembina area.