JED has recently completed drilling the first well in this new core area in Alberta. JED entered into a farm-in arrangement with an unaffiliated company active in this area whereby JED will pay 100% of the cost of the project to earn a 100% working interest before payout and a 50% working interest after payout. JED is planning to drill, complete and tie-in 15 wells on this project before the end of March.
This property was recently acquired by Enterra Energy Trust. As per the recently announced Agreements of JED and Enterra, JED has farmed in on these properties paying 100% of the development costs to drill and tie-in 11 wells to earn a 70% interest in the wells.
Cumming Y Unit
JED plans to commence the second phase of drilling in this property. The first phase of drilling consisted of drilling 5 wells. As a result of the success of the first phase, a 10 well second phase will commence this month and is expected to be completed before the end of March. Enterra owns 46.7% working interest in this Unit. JED has farmed in on Enterra's interest whereby it pays 100% of the development costs to drill and tie-in the wells to earn a 65% working interest.
JED also plans to drill over 10 additional wells in various other areas in southern Alberta including the properties acquired by Enterra from Rocky Mountain Energy.
It is anticipated that JED will also obtain additional development opportunities as a result of the exploration work planned by JMG Exploration, Inc. If JMG's exploration efforts result in the discovery of commercially viable reserves with the potential for a substantive development project, Enterra will have the right to purchase up to 80% of the property and both Enterra and JMG will enter into a joint venture or farm-in arrangement with JED for development of the properties. "The arrangement with JMG will provide JED with additional development opportunities that supplement the ongoing developments with Enterra and other entities," stated Tom Jacobsen, CEO of JED.
Since its inception in September 2003, JED has drilled 27 wells, 19 of which were drilled in the fourth quarter of 2004 meeting its target of exiting over 700 boe/d at the end of 2004. As detailed above, JED plans to drill over 35 wells in the first half of this year. "We are pleased to begin executing the JED business plan and look forward to further accelerating our development," stated Al Williams, President of JED.
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