PetroGlobe Completes Winter Drilling Program
PetroGlobe has completed its winter drilling program and planed its 2006 capital program.
Operational Update - Alberta:
PetroGlobe drilled and cased an additional four wells in early March in the Cynthia and Pembina areas. Tie-ins are ongoing on these four and the previous 13 completed wells. The first tie-in is complete and the company is shipping gas to the Keystone plant at a rate of 660 mcf/d (18.8 E3M3). Some of the wells are being evaluated for fracture stimulation to enhance productivity.
In the Leduc area, PetroGlobe is re-entering an existing well for completion of the upper Manville zone for commercial gas production.
Operational Update - West Texas:
PetroGlobe and its partner, Pearl Exploration and Production Ltd. (formerly Newmex Minerals Inc.) leased approximately 100,000 gross acres in the Palo Duro Basin in West Texas. PetroGlobe has a 55% net working interest in the lands and is the designated operator. In addition the Company retains the 10% working Interest in the 63,000 acre area of mutual interest (AMI) operated by Vintage Petroleum Inc.
Test data announced by various operators indicates a resource base of over 100 BCF per section in the Lower Pennsylvania Shale (Bend Group). PetroGlobe is evaluating which completion technique will optimize the commercialization of these reserves. In addition, all test wells indicate potential oil and gas in the shallower zones (San Andres, Glorietta, Clearfork, Wolfcamp, Cisco and Canyon). We have not as yet tested these prospects.
2006 Drilling Program:
In Alberta, the Company plans to drill up to 50 wells in the 43,000 acre farm-in block in Pembina. When the Company consummates the 16-township block farm-in, up to another 50 wells may be drilled in 2006. Equipment availability will be a limiting factor in achieving the extended drilling program.
In West Texas, the Company is finalizing plans to drill four validation wells within the 100,000 gross acres acquired by the Company. The plan is to test the Pennsylvania Shale at approximately 3,500 m depth, and then test each of the uphole zones of interest. In the event that there are commercial oil zones, the 2006 program will be stepped up to include up to a 22 well shallow development program drilled on 40 acre spacing. Oil production will not require the same infrastructure that will be necessary for gas production from the area. Oil production may therefore provide the Company with early cash flow that can further finance the deep gas development. With success, we expect the deep gas to be on stream in 2007.
PetroGlobe Inc. is listed on the TSX Venture Exchange, symbol PGB. There are 26.9 million shares outstanding, 28.3 million fully diluted. The 52-week range is $0.64 - $2.20. The market cap is $50 million based on a recent close of $1.80. PetroGlobe Inc. is an oil and gas exploration and production company. Major properties are in Palo Duro Basin of West Texas and the Cynthia, Pembina and Leduc areas of West-Central Alberta.
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