In December 2003 Blizzard Energy entered into a Farm-out Agreement in the Grande Prairie Area with a major Canadian oil and gas producer Blizzard has completed well site operations on 12 wells (including re- completions, drilling and testing) with a success rate of over 90%. Blizzard is currently tying in these wells and production of 3 to 4 mmcfd (net) is expected to commence by the end of September at a total cost of less than $6 million. Operations in the Grande Prairie area are ongoing and will result in additional production adds.
Blizzard is also pleased to announce that it has exercised its option to double the capital commitment in the Grande Prairie area Farm-out from $14.5 million to $27.0 million. As part of this election, Blizzard has renegotiated certain terms of the Farm-out and brought in an exploration joint venture partner.
Important changes to the farm-out agreement are as follows:
Blizzard has exercised its option to increase its commitment under the
Farm-out from $14.5 million to $27.0 million.
Blizzard now has until April 30, 2006 to incur and pay for these
The total expenditure cap for rework costs that qualify for the
commitment has been increased to $9.0 million.
Blizzard has received a copy of a 106 square mile 3D seismic program
covering much of the farm-out lands at no cost to Blizzard.
In conjunction with these changes to the Farm-out Agreement, Blizzard
has entered into a Participation and Farm-out Agreement with an
arms-length private exploration company ("ExploreCo") whereby
ExploreCo has committed to incur and pay for at least $11.0 million of
exploration and development expenditures on the Grande Prairie area
Blizzard Energy Inc. announces production guidance estimates for the remainder of 2004 and for 2005. Our current production rate is 9 mmcfd and comes out of one core area in Sousa, Alberta. We have an additional 3 - 4 mmcfd behind pipe in the Grande Prairie area which we anticipate to be on stream by the end of September, and total corporate production will reach approximately 14 mmcfd by year end 2004. The planned 100-well 2005 winter drilling program at Sousa and ongoing operations at Grande Prairie should bring total corporate production to approximately 25 mmcfd by spring 2005.
Blizzard is an Alberta-based oil and natural gas company engaged in the exploration for, and acquisition, development and production of, oil and natural gas in the Western Canadian Sedimentary Basin.