Programs 1, 2 and 3 have resulted in a 100% success rate with 23 of the wells now completed; and two additional wells being completed and tested at this time. In seven months the Company will have increased its production capability to over 800 BOE's per day. The Company anticipates it will have 39 wells tied in and on stream by year end (in Canada) and Tudor's future estimated cash flow from these wells will be approximately $1 million per month, assuming an average oil price of $40 Cdn. and $5 Cdn. for natural gas.
Drilling program no. 4 proposes to drill 50 new wells as soon as equipment becomes available. Forty of these wells are to the deeper Mannville zone, with the remaining wells to the Viking. We are assuming an 80% or better success rate as the majority of the proposed wells are step-outs or downspacings to our successful Deal 1, 2 and 3 wells. Tudor will put up 70% of the funding and retain 81% of the profits.
Tudor's working interest share of the projected cost of the 50 well program is $8 million; which funds will be raised through an Offering Memorandum. The market is looking for good quality drilling prospects, and preliminary indications are that funds are readily available for projects of this kind.
In order to concentrate on oil and gas and our properties in Central Alberta, Tudor is anticipating selling its smaller oil and gas production in the U.S.A.; and discussions continue with other groups that have shown interest in purchasing both its skate sharpening and leather operations. These transactions would bring Tudor back to a pure oil and gas company with its core, or total assets, in Central Alberta.
Negotiations have also been initiated with respect to the purchase of some of our partner's interests in certain of our Canadian wells.
Tudor is debt free; with over $3 million cash on deposit.
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