The survey is scheduled to start on or around 15 March 2007 and will be acquired over several existing leads defined by earlier 2D seismic supported by subsurface well control. The objective is to evaluate the surface to basement potential of these leads including the Wabamun formation that is gas productive in the near vicinity. It is anticipated that at least one or more drillable locations will be finalized after receipt of the processed 3D seismic data, which is expected before the end of the second quarter.
Together with its Canadian partner, FAR now controls key acreage in the area and upon completion of the 3D program will seek industry partners to drill the prospects identified. FAR's interest in the venture is determined on an expenditure equalization formula that on present estimates will see FAR controlling a working interest of around 36%.
Other Canadian Developments:
In other developments concerning its Canadian operations, FAR has entered into a new Option Agreement to participate for a 15% working interest in a 4,000-meter Wabamun test in the Karr area of Alberta Canada. The Option will only be exercised following the appointment of an operator for this proposed test.
The option prospect (50 BCF plus potential) is defined by 3D seismic and is analogous to the Berland River Gas Field (57 BCF). Whilst technical analysis suggests an excellent chance of encountering the seismically defined Wabamun reservoir, the play is supported by additional secondary targets in the Triassic Halfway formation (productive at the analogous Karr Gas Field (12 BCF)) and Cretaceous (estimated 2BCF potential) at shallower depths on the leases (800 acres). The operator for the exploratory well has not been identified at this time.
Initial production rates of 15 million cubic feet per day are considered likely for the Wabamun reservoir based on successful analogues. Gas prices are similar to those achieved in the broader North American market with payback possible within 18 months.
FAR has previously participated in the drilling of wells on Suncor acreage and prospects in the Clear Hills and Kakwa areas. The latest of these, the Clear Prairie 3-8-90-12 well has been cased for Production after electric logs confirmed the presence of hydrocarbon pay.
Commenting on the announcement, FAR's executive Chairman Michael Evans said:
"The commencement of this 3D seismic program in Canada compliments seismic programs underway offshore Senegal and planned at NE Waller. These are designed to generate a drilling inventory capable of delivering excellent leverage as prospects reach drill status. FAR has gained entry to these ventures early in the exploration cycle on ground floor terms. Given equity levels (30% and above) FAR is advantageously placed to farm out risk (should we elect to do so) on favorable terms in future wells drilled on our properties."
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