SilverStar's Joarcam prospect can be characterized as a low risk property with oil at a shallow depth and with a short payback period and long life reserves. A total of 12 locations can be drilled at the Joarcam prospect and it is anticipated that the field will produce 500 barrels of oil per day (bbls/d) when fully developed.
The first Joarcam well drilled in January on the property was the 4-27 well and is currently producing light, high quality crude. As well, a behind pipe gas discovery in the 4-27 well indicates the presence of commercial gas on the prospect. The operator constructed tie-in and oil storage facilities on the lands and has been shipping oil since mid-January 2004.
SilverStar has engineered three new drilling locations, the first being an offset well to the 4-27 well currently in production and the second being an offset from a historical well that has yielded 156,000 barrels.
SilverStar has commissioned and received third party engineering reservoir valuation report of the current production and the Company has come to terms with 1048136 Alberta Ltd. on purchase price. The two parties are in the process of formalizing an agreement on the purchase.
The prospect lands, S/2 10, W/2 22 and W/27-47-20 W4M, are located about 25 miles southeast of Edmonton, Alberta. There is year round access to the property and the cost of drilling and completing a well at Joarcam is $300,000.
Under the terms of the agreement with 1048136 Alberta Ltd., SilverStar will drill, complete and tie-in three wells over the next 6 months to earn the 70% working interest. Following the required leasing, surveying, licensing and site preparation, SilverStar plans to spud the first well on the prospect within 14 days.
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