In its first 30 days of operation, the 4-21 discovery well has produced approximately 6,000 bbl of oil and is presently producing at an approximate rate of 150 barrels per day ("bbl/d"). Similar flush production rates are expected from the two newest producers. We expect to have a total of four or possibly five Bailey wells on production by year-end.
We are also pleased to announce that effective December 1, 2004, we will acquire from one of our two partners, an undivided 20% interest in the Bailey property and two unrelated properties at Flaxcombe and Sandgren. The total purchase price of the acquisition is C$2.1 million and closing is scheduled to take place on December 15, 2004. Under our joint venture agreement, the remaining partner has elected to acquire an undivided 5% interest in the acquired assets for a proportionate share of the $2.1 million purchase price. Dynamic's resulting working interest in the properties will increase from 60% to 75% and our net cash payment will decrease to approximately $1.6 million.
After payout, the three earning oil wells at Bailey are expected to decrease from a before-payout interest of 100% to 75%. Interest in the three standing potential joint oil wells is expected to be 75%.
By year-end, we expect to drill another five development wells, bringing the total Bailey wells drilled in 2004-Q4 to twelve. Design work is underway on a central oil-processing facility, including a pipeline and an oil battery. Construction is expected to be complete by the summer of 2005.
At Flaxcombe and Sandgren, we recently drilled one well on each property. One well was unsuccessful and the other was completed as a natural gas well awaiting tie-in.
Funds needed to complete the acquisition and commence with drilling activities will be provided by our bank operating line of credit. Cash required to carry out longer-term plans on our three Saskatchewan properties is to be sourced from our operating cash flows and appropriate bank debt.
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