Petsec Energy announced Wednesday that it has expanded its shale oil project area in the Western Sedimentary Basin of Alberta, Canada.
Petsec Energy has entered into an agreement that will increase the shale oil project area from 17,280 lease acres to 26,080 lease acres. Petsec Energy Ltd.'s net holding interest increases from 4,234 lease acres to 6,434 lease acres.
The Company will also drill its first horizontal well to test for oil productivity in the shale oil reservoir. The well is expected to spud in late October 2012 and will be fracked and completed for production. The estimated cost to Petsec Energy of increasing its lease acres and of participating in the horizontal well is $3 million.
The well, if successful, has the potential to indicate a recoverable resource in the order of 10 to 15 million barrels of oil within Petsec Energy's 6,434 lease acres.
Petsec Energy's Chairman, Terry Fern, said, "The encouragement we gained from the vertical science well we drilled in the shale oil project area in the second quarter of this year has caused us to acquire further leases and participate in our first horizontal well for shale oil. We are looking forward to the production completion results which we hope to have achieved early in 2013."
The Western Canadian Sedimentary Basin contains one of the world's largest reserves of petroleum and natural gas. It is Canada's largest hydrocarbon producing province and accounts for approximately 90% of the oil and gas produced within the country. The first discovery in the basin was made in 1883, and production to date has exceeded 13.7 billion barrels of oil and 47 trillion cubic feet of natural gas.
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