The Acquisition was for all rights in 23,040 acres gross (5,935.6 acres Net) with 1,088 net acres developed. Three exploration wells have been drilled to date. One well tested 5.8 mmscf/d on DST from one zone and 3.7 mmscf/d from another zone. Plans are in place to tie this well in during the first quarter. Expected production levels are in the 1.0 to 2.0 mmscf/d on a gross basis. The working interest in this well is 30% before payout and 18% after payout.
Two wells will be tested during the first quarter at a working interest of 70% before payout and 38.5% after payout. An exploration well will be drilled in the first quarter at a working interest of 23%. Interests in the entire land block vary between 13.5% and 70%.
This area is an exploration focus area and provides Choice with at least 4 more exploration plays in its inventory. The additional exploration acreage fits into the Company strategy of adding exploration acreage and play types at a modest cost. In addition there will be up front cash flow with the tie in of the 3-28 well. The well costs and depths are modest as most drilling is 1,500 to 2,000 meters. There are multiple zones of potential including the Gething, Falher, Dunvegan, Montney, Doig and Viking zones.
Choice is also in discussions with an industry partner about participating for 30% of Choice's acquired interest in these lands.
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