New Range acquired a 5 km gas pipeline that runs adjacent to the Company's land in the Pembina area. The pipeline was acquired at a nominal cost and has enabled New Range to tie in the 2-12 well to the main sales gas pipeline in the area. On July 6, 2007 the tie-in was completed and the well was placed on production. As of today's date, the well is flowing oil at a rate of 70 Bbl/day (45 Bbl/day net) with associated gas production of 200 Mcf/day (128 Mcf/day net) through a 26/45 choke.
As a result of the pipeline acquisition and the ability to deliver gas directly to the sales pipeline, two new drilling prospects are now viable for the Company from the 2-12 location at Pembina. These new wells can be drilled directionally from the 2-12 lease, which enhances the economics of the project since additional lease, road and pipeline costs are not necessary.
New Range will produce the 2-12 well for several months to determine its long range productivity before making a decision on the new drilling prospects.
New Range is the operator of the Pembina property and has a 64% working interest.
The Knopcik 14-9-74-11W6 well was placed back on production on May 24, 2007 at a restricted rate of 1.2 MMcf/day (360 Mcf/day net) and has been producing steadily at this rate since then.
In order to increase the gas rate at 14-9 the operating partner of the well is working on making the following changes and modifications in the short term:
1. Increasing the dilution gas stream available by adding compression and/or manipulating the pipeline pressures downstream of the 14-9 well.
2. Relicensing the system pipeline to a higher sour rate (from 5% to 6.5%) in order to reduce the proportional amount of dilution gas necessary and increase the production rate at 14-9.
New Range has a 30% working interest in the non-operated Knopcik well.
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