Initial primary production tests are commencing in Montana following the company's preliminary reservoir revitalization in our Fiddler Creek Prospect. In Australia, the company has acquired 686 kilometers of new 2D seismic data in the Beetaloo Basin. Over 50% of the processing of the new data has been completed. Title to all of PetroHunter Energy Corporation's oil and gas assets is owned by its wholly-owned subsidiary, PetroHunter Operating Company. (PetroHunter Energy Corporation and PetroHunter Operating Company are collectively referred to herein as the "company.") Each of the statements set forth below, regarding the total number of net mineral acres owned by the company and the net mineral acres in each project, refers to the combined total net mineral acres owned 50% by the company and 50% by its working interest partner (MAB Resources LLC).
Piceance Basin Natural Gas Operations – Colorado
The company originally planned to execute a 25 well program in the Piceance Basin, and, as of November 27, is exceeding this objective with a total of 23 drilled and cased wells with three additional wells in the process of being drilled. Eleven wells, in which the company owns a participating interest, have been completed and are currently connected to the gas sales pipeline and the company is receiving revenue from natural gas production. Thus far, five wells have been drilled by the company's contracted rig and the rig will continue drilling on the same lease. In total, the company has drilled and completed 11 wells in the Piceance Basin that are producing, an additional 12 wells that have been drilled and cased, and three additional wells in the process of being drilled.
The company has received approval for five drilling permits in the Buckskin Mesa Prospect, a 20,000 net mineral acre project area in the northern Piceance Basin. The company has contracted a second drilling rig and is mobilizing the rig to spud the Anderson 6-16 location.
Heavy Oil - Montana
The company's heavy oil prospects in Montana include more than 60,000 net mineral acres. To date, two wells are currently producing crude oil as part of the company's initial development strategy to initiate primary production using the original perforations in existing well bores. These preliminary tests are allowing the company to analyze the reservoir and obtain oil samples for testing. The projects are on schedule with additional wells slated for workover activity over the next three months.
Heavy Oil - Utah
In Utah, the company continues to evaluate drilling locations in the West Rozel Field and the Gunnison Wedge.
The company has completed its Acquisition of 686 kilometers (426 miles) of 2D seismic data in the Beetaloo Basin, Northern Territory. Data are currently being processed along with the reprocessing of the data that were acquired about 15 years ago. Interpretation of these data and subsequent mapping of the basin has started with the objective of developing at least eight well locations for a drilling program to start in the second quarter of 2007.
The company has calibrated petrophysical evaluations on six of the previously drilled wells in the basin with core examinations and field work, and as a result of such analysis, the company believes there is a likelihood of both conventional and unconventional oil and gas resources.
The company is negotiating agreements with two Australian drilling companies to provide rigs for both the shallower conventional oil plays (35 gravity oil) and the deeper unconventional fractured shales and basin centered gas accumulations. The permitting process for both drilling and land is ongoing to ensure a second quarter 2007 commencement of the drilling activities.
Garry Lavold, President and Chief Operating Officer, states, "The drilling program in Colorado is showing positive results, the Montana heavy oil program is providing the necessary data for planning our 2007 operations, and the Australia program continues to look promising as additional data are received. We are excited to report that our progress is meeting or exceeding our planned objectives."
PetroHunter Energy Corporation, through the operations of its wholly-owned subsidiary, PetroHunter Operating Company, is a global oil and gas exploration and production company with primary assets consisting of an undivided 50% working interest in various oil and gas leases and related interests in oil and natural gas prospects, including approximately 220,000 net mineral acres in Colorado, Utah and Montana, and seven million net mineral acres in Australia. Each of the statements set forth above, regarding the total number of net mineral acres owned by the company and the net mineral acres in each project, refers to the combined total net mineral acres owned 50% by the company and 50% by its working interest partner. In each of its principal areas of operation the company is obligated to pay the first $50 million of total capital expenditures, except for its prospects in Montana and Australia, where the company is obligated to pay the first $100 million of total capital expenditures incurred.
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