Frank W Cole, President and CEO, commented, "This expansion is tangible evidence of the confidence we have in the various independent studies supporting our drilling effort and our oil recovery method which, simply stated, increases the flow rate of heavy oil by steam heating. If our initial four-well project goes as expected, we want to have ample room to expand in order to maximize our profit potential. We will seek to unitize the acreage for our benefit." One well, the Cole Federal I-26, was partially drilled in late 2003 on land leased from the Bureau of Land Management, and is scheduled for re-commencement of drilling in mid-June 2004. The drilling rig is on location. Another well, the Cinnamon Bear 2-4, on private (non-BLM) acreage, was drilled in early 2004 and is awaiting completion. Completion of this well is scheduled for May 2004. Production facilities are scheduled to be installed in June. The well will be tested, without heat, for several weeks, after which steam injection will commence.
Two additional wells are in various stages of planning and permitting. All four wells in the 2004 project phase are planned for production by early fall, with initial heat-stimulated production testing in July 2004 on the first Cinnamon Bear well. Energytec is preparing to install a portable steam generation unit for use on the project.
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