The reserve audit covered by the SCR approval defines an initial production area of about 3,500 acres, about 25% of the total area under license. This area can be extended based on the drilling of additional exploration wells pursuant to the Company's current Exploration Contract, which was recently extended for another 2 years until 2007.
"We are especially pleased that the SCR has concurred with our findings in defining such a large commercial area in this initial study of the field,'' commented Bruce Falkenstein, V.P. Exploration. "Even though our level of proved reserves is not affected by this study, the production area delineated by the SCR is more than twice the area previously used in our reserve studies. This study supports our aggressive approach to expand exploration drilling within our 14,111 acre License.''
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