The McAlester Fuel Company, the operator of the project says that drilling operations will commence this week.
The first three locations of a twelve well program will drill through the Massive zone, both Lobe #1 and Lobe #2, at approximately 6,800 feet and will penetrate several zones which the operator feels have a reasonable possibility to be productive. There are a total of eighteen zones in total which have oil or gas production history elsewhere in the oilfield. These zones will be evaluated in the first two well-bores.
A new discovery located 467 feet from our lease or approximately 934 feet (or 1/6th of a mile) from our first well-site has recently been placed on production. The well is estimated to have produced approximately 750,000 cubic feet of natural gas plus an undisclosed amount of condensate daily through recent time. The impact of this production so close to our development provides additional evidence of the presence of previously overlooked and not produced oil and gas bearing zones in our immediate vicinity and affirms the original prognosis for the project, namely small/negligible risk, but high potential for substantial reserves.
The property has some existing production and is well served with production infrastructure, a gas pipeline runs through the property. Productive wells can be placed on production within thirty days. Currently prevailing market prices for natural gas is between $5.00 and $6.00 per thousand cubic feet at the wellhead and oil prices range from US$33 to $37 per barrel.
The San Bernard No.1 well has been placed on production at a rate of approximately half a million cubic feet of gas per day and the North Strahan No.1 is awaiting completion. Portrush has a 5% interest in these two wells. Recent weather improvements have allowed the Mission River project to get underway, we anticipate improved weather conditions will allow uninterrupted drilling and development for the next several months.
The Werderman 1-21 well in Lenox Michigan has reached total depth. The target, the south-eastern extension of the Niagaran reef which is productive in the Richards and Martin well was not encountered. A detailed proposal to bring the existing gas production on stream and drill the shallow horizon is about to be implemented. A timeframe for this development is being worked on by the company's consultants and we anticipate having a workable proposal within thirty days.
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