Dejourís winter 07/08 exploration is meeting with exceptional results to date. As of January 21, Dejour has drilled and cased 5 of its first 5 new project exploratory wells (average working interest 90%) and will spud its sixth new project exploratory well within two weeks (90% W.I.).
The first of these exploratory wells has been completed and flow tested. Gas flow rates leveled at 3 mmcf/day at the end of the 24 hr test. The well also produced a total of 152 bbls of light oil over the test period. Completion programs for the remainder are being finalized and results will be forthcoming as these programs are implemented throughout January and February.
Dejour has reached TD on a third well (Drake 94H1) at its previously mentioned Drake Field extension with a fourth, fifth and sixth well to follow prior to the end of February. Initial log indications are that the well encountered the target sand with a gas show and casing has been ordered. Dejour has a 100% WI in these wells. Drake wells 4, 5 and 6 will test the Notekewin and several deeper zones identified by 3D seismic. The initial two wells drilled at the end of last winter's drilling season have now been completed with small CO2 fracture stimulations.
Initial flow rates following the stimulation were greater than 2 mmcf per day natural gas from each of these wells. The Company, utilizing good engineering practice, expects to produce these two wells at > 2.0 mmcf/day combined on completion of the tie-in. Flow line rights of way have been cut and lines are being laid for tie-in prior to the end of Q1.
Dejour also expects its non-operated 30% Saddle Hills discovery to be tied-in and an offset well drilled during Q1. Two zones were tested at this location, with combined rates greater than 1.5mmcf/day.
Lastly, Dejour is working plans to tie-in as many of its new discovery wells as possible prior to break up. Reservoir engineering calculations on these properties will be forthcoming prior to the end of February. Further development will follow.
Dejour continues to target production rates > 10mmcfe/d (million cubic feet equivalent per day) natural gas to its WI interest from these operations by the end of Q1-08.
BOEs [or 'McfEs' or other applicable units of equivalency] may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl [or 'An McfGE conversion ratio of 1 bbl: 6 Mcf'] is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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