Pacific Rodera Energy Inc. reported the following recent developments in their Canadian properties.
Pacific Rodera has spud the first of the two wells to be drilled this winter on Exploration Licence 423 in the Northwest Territories (NWT). The Dahadinni B-20 well (formerly named Haywood B-20) is being drilled into the Devonian and Silurian formations. The structure (as defined by seismic) is estimated to be twice the size of our Summit Creek B-44 structure. In the first quarter of 2006, the Summit Creek B-44 well tested at 20 mmcf/day with 6300 bbls/day of light oil/condensate. The Summit Creek B-44 well was recently granted a 24 section Significant Discovery License (SDL) which is 50% larger than the standard SDL's granted by the Canadian Government. Once a SDL is granted the land is held indefinitely.
The second well, Keele River L-52 (formerly named Cloverleaf B-44), is expected to spud on or about February 15th. This well is being drilled to evaluate a shallow Cretaceous-aged reservoir which is believed to be oil bearing. Keele River L-52 is located within tie-in distance of the Norman Wells to Zama pipeline. This pipeline has 30,000 bbls a day of spare capacity which would allow Pacific Rodera to commence production from Keele River L-52 in a relatively short period of time should an oil reservoir of significance be discovered.
Pacific Rodera is encouraged with the recent proposals by TransCanada Pipelines Limited to spearhead the development of the proposed Mackenzie Valley gas pipeline. We believe that TransCanada, as a common carrier with strong motivation to backfill production on its existing pipeline, could provide the necessary impetus required initiating this very important project. All of this augurs well for Pacific Rodera and the possibility of bringing commerciality to our significant gas discoveries.
Pacific Rodera is expected to spud the first well of a multiwell program in central Alberta in mid-February. To date, Pacific Rodera has acquired 15,500 gross acres of land in this area under its previously announced joint venture agreement.
Pacific Rodera has entered into a memorandum of agreement (MOA) with several First Nation bands in Saskatchewan relating to the acquisition, exploration and development of prospective lands located in Saskatchewan. Pursuant to the MOA, these First Nations bands have requested the Saskatchewan government to impose an 18-month moratorium on the sale of the Crown-owned mineral rights associated with approximately 88,000 acres of land located within the Bakken play area of SE Saskatchewan. Under the MOA, the First Nations bands have granted Pacific Rodera the right to explore and develop all oil and gas reserves located on the lands in which the First Nations acquire rights. One of the requirements for the First Nations to acquire the subsurface rights is that they first acquire the surface rights from the present land owners. Because of this requirement, Pacific Rodera expects the actual land acquired will be materially less than the 88,000 acres. The First Nations bands have agreed that they will continue to negotiate exclusively with Pacific Rodera on the acquisition, exploration and development of these lands.
Entering into the MOA is consistent with Pacific Rodera's strategy to develop large contiguous land positions on high impact plays. Pacific Rodera's management team, who were a significant part of the team that brought the Bakken to commerciality while at Mission Oil & Gas, are very excited about these prospective lands.
Pacific Rodera has approximately $24.5 million in working capital to pursue its current strategy of capturing large land positions to provide significant running room and optimization of "program" type drilling. Pacific Rodera is continuing to search for companies and properties that meet these criteria at the "right" price.
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