The Joint Venture Properties are located east of an extensive area that contains major resources of natural gas of biogenic origin trapped in tight upper cretaceous shelf sediments. These types of shallow gas reservoirs have been extensively developed in Southeastern Alberta, Southwestern Saskatchewan, and Montana. The biogenic gas is primarily methane, contains no liquid hydrocarbons, and is basically of pipeline quality. Aspen and Westchester each own a 50 percent working interest through the Joint Venture. Aspen will act as the operator on the Properties.
The Properties are in the form of seven exploration licenses, which are for a term of two years each, requiring at least one well drilled per license during the primary term. To the extent the land comprising the license is sufficiently drilled, the underlying land will automatically be converted to a lease for the life of the production. The Properties are not currently revenue-producing assets.
It is anticipated by the Joint Venture that an initial five well exploratory drilling program will be required to for the initial evaluation of the potential of the Properties. Drilling depths are relatively shallow (less than 1000 meters) and completion procedures include sand fracture stimulations. Estimated completion and testing cost of the initial well is approximately Cdn.$450,000. Total cost for the five well program is estimated to be Cdn. $1,400,000.
"Exploration opportunities like this shallow gas project are a key component of Aspen's future," stated Robert Calentine, CEO of Aspen. "We are focusing our efforts on identifying projects that are relatively low cost, where we can take significant working interest, have control of the process, and that have the potential to deliver substantial returns to our shareholders."
A report dated June 23, 2004 entitled "Minton Natural Gas Exploration Prospect, Southern Saskatchewan at July 1, 2004" has been prepared by Ron Pacholko, P. Eng. of Trimble Engineering Associates Ltd. in respect of the properties acquired by the Joint Venture and is available on Aspen's website.
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