The Tilston property has excellent potential for multi-well production and reserve additions. A previous vertical stratigraphic information well, drilled by Bulldog Energy Inc. and its partner, was cored in our zones of interest indicating a hydrocarbon column thickness in excess of 15 meters. 3-D seismic indicates the play may extend over a large area on lands controlled by Bulldog and its partner. A follow-up horizontal well in June 2005 drilled two legs in two separate zones with net pays of approximately 600 meters and 400 meters. The well produces 34 degree API oil at current rates of approximately 250 bbls/day (125 bbls/day net). This well has been flow lined and on production for five months. It has demonstrated a very attractive oil production and water cut profile. Oil production facilities and water disposal are in place.
Our drilling inventory on the Tilston property is currently 10 horizontal locations (0.5 net). In addition, the stratigraphic evaluation well currently being drilled will provide information which may further expand the number of drilling locations. Bulldog has a 50% working interest and is the operator of the project.
We have also expanded our drilling opportunities through successful land sales at Browning (96% working interest in existing production and 100% working interest in the new lands) and at Fremantle (100% working interest in existing production and 35% working interest in the new lands). Bulldog has 3-D seismic coverage on the new lands and has selected four horizontal locations (2.7 net).
Currently, production volumes from our Tilston, Browning, and Fremantle properties are averaging 180 bbls/day of light crude oil. With the current benchmark WTI oil price of US $60/bbl, our operating netbacks after royalties and operating costs are in excess of CDN $45/bbl. With everything in place for our 2006 first quarter drilling program, we expect to add significant additional production volumes by March 31, 2006. We are also aggressively pursuing additional growth opportunities.
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