Cougar O&G has acquired an additional 3 sections of land (1920 acres) at an Alberta Provincial Government land sale on Wednesday August 25, 2011.
These lands are on the southern boundary of lands we acquired in July of 2010 and the 3D seismic program conducted in early 2011. We believe there are extensions of reserves identified in the seismic and the Reserves Assessment and Evaluation of the new or previously unevaluated Trout Core oil properties of Cougar, released on July 14, 2011.
That review completed based on existing information in the public domain coupled with the extensive Cougar 3D seismic program placed a $77.4 million Cdn Net Present Value (NPV) discounted 10% for Proven (P1) plus Probable (P2) plus Possible (P3) and an estimated 2.7 million barrels recoverable P1+P2+P3 from the project. The report is based on a previously announced logical development plan with a 2-4 well drill program to be followed up with a 4-6 well program. Those programs are dependent upon financing.
William Tighe, CEO of Cougar provided, "We are pleased with the extension of the lands acquired based on the geological analysis with extensions of structures identified in the 3D seismic. Despite challenges from the horizontal well inconclusive results due to insufficient pumping capability with the equipment currently available to properly test that well, the continued Rainbow Pipeline shut in since late April and the resulting need to truck our oil to markets in a 12hr round trip per load often in inclement weather and at discounts to contract prices, the Slave Lake area wild fires in early May, during which the focus was to keep all the wells producing, - we in addition have kept the projects moving forward wherever possible.
The drilling program, as a drill ready program which is subject to financing, is ready to move forward as soon as financing is sourced. The engineering report identifies this project has the potential to add revenue, estimated cash flow with pay outs on the capital program in the 130 day range, and add substantial proven reserves once the wells have been producing for 6 months, while continuing our goal of attaining 2000 bbl/d production from operations."
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