Under the terms of a farm-in agreement with Petrolera del Comahue S.A. of Buenos Aires, Argentina ("PDC"), GP Energy can earn a 12.5% working interest in existing and future production of the Flor de Roca Field within the General Roca Block by funding a $400,000 workover program of the GR-X-6 and AN-X-1 wells. This interest is subject to a 10%-15% net profits interest paid to EDHIPSA, the provincial oil company of Rio Negro Province. Workover operations on the AN-X-1 well have commenced. Under a second agreement, the Company can increase its ownership of production in the Flor de Roca Field from 12.5% to 50% by drilling a horizontal well into the Quintuco reservoir at the Flor de Roca field, which has previously produced oil from vertical wells.
South Cedar Creek Anticline Project, Harding County, South Dakota
GP Energy reports that Elenburg Rig #8 has moved to the Spyglass State #3-30 location and commenced drilling operations with a primary objective of gas in the Cretaceous Shannon. This well is the fourth obligation well of five that Spyglass Cedar Creek, LP of San Antonio, Texas ("Spyglass") has committed to drill. Spyglass is the operator. The Company has a 30% interest in the first five obligation wells, and a 47.5% working interest in the balance of the South Cedar Creek Anticline Project that consists of 63,532 acres in Harding County, South Dakota.
North Short Pine Hills Project, Harding County, South Dakota
GP Energy reports that Elenburg Rig #8 will mobilize to the GPE State #32-1 well location immediately after completion of drilling operations on the Spyglass State #3-30. GP Energy has a 61.667% interest in the well, which will target gas in the Cretaceous Niobrara. The well is the second obligation well of two that Spyglass NSPH LLC has committed to participate in. The Company is the Operator and has a 70% working interest in the North Short Pine Hills Prospect that consists of 54,626 acres in Harding County, South Dakota.
Woody Creek Dome Prospect, Big Horn County, Montana
GP Energy reports that Champion Drilling is mobilizing their rig to the GPE Tribal #27-10 well location this week. Drilling operations are expected to commence by December 4, 2006. GP Energy has a 70% working interest in the Woody Creek Dome Prospect. The initial test well will test potential oil accumulations in the Tensleep formation at approximately 2,250 feet and the Amsden formation at approximately 2,370 feet. GP Energy is the Operator.
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