Dejour engaged Gustavson Associates, Boulder Co. (Geologists -- Engineers -- Appraisers) to conduct a preliminary petrophysical analysis of the #2-12 well logs and it is their interpretation that the reservoirs in the N. Barcus Creek #2-12 and #1-12 are similar. Throughout drill operations the mud logs for each of the #2-12 and #1-12 wells showed strong evidence of reservoir gas. Both wells were keyed off the Federal #22-12 well drilled by Pacific Transmission Supply Co. in 1979, which reported 260' of possible gas pay.
Completion work on the N. Barcus Creek #1-12 well has commenced. Results should be available within the next 10 days. Completion of the #2-12 will follow immediately.
Dejour and its partners have been advised by the operator that it plans to drill additional wells on this 1,590 acre N. Barcus Creek prospect, which forms part of the highly promising Rio Blanco Project consisting of a total of 5,554 acres. Dejour holds a 25% unpromoted interest in these lands and all actual exploration expenditures. The operator reports that the cost of drilling the #2-12 and #1-12 wells has been less than the original budgeted amount.
This N. Barcus Creek lease block lies directly between a large Exxon lease block directly to the east and a large lease block owned by EnCana to the west. The Exxon lands host four recent natural gas resource discoveries drilled by Williams Cos. immediately offsetting the Company's leases. Exxon previously announced its intention to drill 1000 wells on its leases in that area. Recently, Conoco announced its intention to commence drilling the first of 800 wells on the EnCana lands, which are now subject to a Conoco joint venture, early in 2008.
The N. Barcus Creek prospect has the potential to initially drill up to 40 wells based on 40 acre spacing units with further down-spacing to 10 acre units in the future. Accessible pipeline facilities lay within one mile of the lease boundaries.
This 'Rio Blanco Deep' project is one of over 60 separate exploration projects held by Dejour (average interest over 25%) in its search for and exposure to significant energy discovery in the hydrocarbon bearing basins of Piceance/Uinta in Colorado/Utah and the Peace River Arch of NE British Columbia/NW Alberta Canada, inclusive of the uranium bearing Athabasca/Thelon Basins of Northern Canada through its holdings of Titan Uranium and associated carried/royalty interests.
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