This represents the Company's first test for Coal Bed Methane, and will include coring and canister testing to prove the gas content and the potential amount that is recoverable. Coal Bed Methane is Natural Gas produced from coal seams.
"As part of the land holdings in Joffre, we have an interest in 10 sections of land which we believe contain coal seams in the Horseshoe Canyon formation at a depth of approximately 500 meters," Mr. Donald Benson, Chairman and CEO of Nordic Oil & Gas stated. "We believe that the Coal Bed Methane from these seams is capable of producing 200 to 300 thousand cubic feet per day (MCFD)."
The Nordic team that will undertake the drilling program is comprised of two companies with 50 years combined CBM experience, and they have identified 23.2 meters of potential pay.
"The fact that our lands have such extensive well control gives us a great advantage over other companies in the region," Mr. Benson noted. "The original investment that we made in Joffre in 1993 with our other companies was as a result of some significant planning that we had undertaken two years earlier. We had identified the area as a good candidate for Coal Bed Methane production, but we always contemplated wet gas and thought of CBM as more of an exit strategy from the area.
"However with the discovery of dry Horseshoe Canyon gas in the area, we stepped up our plans to get CBM into production. Once this is on stream it is like an annuity as the production has an extended life span," he added.
The area in question has already proven to be successful in at least two other cases: one company recently drilled four wells, while another is producing 300MCFD from a well it drilled earlier this year.
"We are excited about the prospects for Coal Bed Methane in this area and look forward to drilling our first well," said Mr. Benson. "This, along with our sophisticated log analysis, we will be on the cutting edge."
Mr. Benson went on to say that this has been a very successful year-to-date for Nordic Oil and Gas: "We have generated strong production and revenue growth throughout the year and when coupled with our substantial inventory of proven land in Joffre, we are poised to grow our production levels to even greater heights.
"This, along with our major exploration play in the Preeceville region of Saskatchewan, should provide much stronger and enhanced shareholder value as we close out 2004," he added.
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