Gentry Announces First Oil From Princess Discoveries
Gentry Resources reports that production was initiated from the two new Pekisko oil pools in the Princess area of southern Alberta in September. The new production is located on 70 sections of farm-in lands, where the Company maintains working interests varying from 30% to 50%.
The two pools were identified on a large 3D seismic survey, which was shot late in the second quarter. Two wells, one in each pool, have been completed and each well is now producing at a restricted rate of 20m(3) of oil per day (125 bbls/d). This rate is imposed by the governing oil and gas regulatory body and will continue until solution gas can be conserved and Good Production Practice is obtained. In October, Gentry will begin the work to tie these wells into a nearby battery, which will enable the Company to conserve and sell the solution gas associated with these reservoirs.
Gentry will be initiating an aggressive drilling program targeting six new exploration prospects over the next several months. Development drilling will also be initiated on the new pools prior to year-end.
Regarding gas production and gas sales from the Princess area, as previously reported Gentry has filed an application with the EUB seeking approval to construct and operate a sweet gas processing facility. Gentry reports that there were no local objections to the application on either social or environmental grounds. Unfortunately, Gentry has received one objection from a mid-stream company and consequently Gentry is taking all necessary steps to address this objection via the EUB's recommended Appropriate Dispute Resolution ("ADR") program. Gentry is confident that its application fully complies with all guidelines and that the ADR program, and other available processes to resolve objections, will yield a timely and effective decision that will result in production and sales from the Company's gas wells in the area.
Three wells are scheduled for drilling on the Company's lands in Sedalia, also in southern Alberta. Two recent exploration successes are yielding gross production of approximately 1.2 mmcf/day. Gentry holds a 50% to 55% working interest on these lands.
In the coming months Gentry will be drilling two exploratory wells in a new focus area, located northwest of Edmonton in central Alberta, which is characterized by higher risk/higher reward targets. With recent land acquisitions, additional locations are currently being evaluated.
The Company is also currently participating in several development drilling programs on its long-life, low-decline unitized properties located in southern Saskatchewan and southwestern Manitoba.
Production continues to aggressively ramp up, with current volumes exceeding 2,000 boe/d. Crude oil and liquids comprise 55% of the Company's volumes, while natural gas makes up the remaining 45%.
Gentry continues to add to its large undeveloped land holdings, which currently exceed 60,000 net acres. Aggressive drilling programs, such as the successful and ongoing Princess program, will provide high impact, long-term corporate growth through production and reserve increases. The Company's activities in areas requiring modest capital programs, such as east-central Alberta, will provide near-term steady growth.