All three wells have successfully been drilled and cased to depth and the logs indicate that all wells should be producers. A service rig is onsite and is currently completing all three wells to be producers. Once we have properly flow tested the wells we will be able to release flow rates for each of the wells. Rideau currently has two oil batteries in the area which we hope to start transporting oil to early next week.
The Daly field lies along the northeastern flank of the Williston Basin and produces medium grade crude from the Lodgepole and Bakken Formations. Currently, most wells are drilled to the Bakken, and if both are found productive, produced commingled. Rideau informs us that we intend to commingle produce two of the three wells that have been drilled to date.
The terms of the agreement calls for Pennant to pay 25% of the drilling and completion costs to earn a reversionary working interest of 22.5% before payout, reverting to 15% after payout of drilling and completion costs.
Rideau Petroleums Ltd. operates approximately 99 wells in over 5100 gross leasehold acres within the Daly field. Rideau ranked 6th out of the top 25 operators in the province in 2002. Rideau has two oil batteries on its properties, multiple pipelines and has been successfully discovering and selling oil from the Daly field since the early eighties. Rideau, as operator, will handle all aspects of managing the wells as well as selling the oil on Pennant's behalf.
Thomas Yingling, president of PEN stated, "We are very excited to have hit three out of three on the first wells to be drilled. I am excited to see how we will do on the fourth well which we should commence drilling soon. We are very pleased to be part of such a successful drill program with oil prices being as strong as they are. With Rideau's strong infrastructure in place we look forward to being able to execute selling the oil as early as next week."
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