Dejour announces the Company has now drilled or participated in drilling 13 wells on 9 of its 14 project areas, since inception of exploration activity in the Peace River Arch in late 2006. Six wells have tested gas and one has tested gas and oil. Three are recent wells for which completion and evaluation operations are underway. There are three more wells to be drilled to complete Dejour's winter-07/08 program in the Peace River Arch area.
These positive results position Dejour to target initial daily production rates > 10,000,000 cubic feet of natural gas equivalent per day (MMcfGE/d) from multiple operations in this area. Pipeline construction is well underway in the Drake B.C. area. National Instrument #51-101 independent reservoir engineering reports will be forthcoming prior to the end of March 2008, as required to assign reserves and values to year end 2007. A second report will be created at the end of the current exploration and development program to update these results. As of today's date NYMEX Henry's Hub Natural Gas has risen to $8.59 (US/MMBtu).
Chairman & CEO Robert L. Hodgkinson states, "the Peace River Arch projects have been executed very efficiently and effectively. The well logs and flow rates are better than anticipated and show potential for considerable economic success. The combined production from these wells will place the company in an excellent cash positive position and provide the financial means to fund present operations. Further, our discoveries in this area strongly support Dejour's program of allocating capital to the exploration and development of North American oil and gas properties that are highly prospective for significant discovery, during this period of market opportunity."
Dejour has now flow tested both its third and 4th wells, both 100% owned. Well #3 flowed over 500,000 cubic feet of natural gas per day from the 'Notekewin' sands with porosities as high as 24%. The #4 well flowed over 650,000 cubic feet of natural gas per day. Neither of these wells has been subjected to frac due to strong natural rates of gas flow. Both wells will be placed on production shortly.
Well #5 has now reached total depth of 3700 feet. The primary objective on this location is the seismically defined 'Halfway' sand. Well logs indicate high porosity sand with good gas show at this interval. In addition up-hole gas shows have all contributed to the decision to immediately case this well for production testing. This will be complete by early next week. The drill rig will then proceed to the #6 location to again test multiple zones which show potential on 3D seismic coverage analogous to the #5 well.
The #6 well will conclude the Drake exploration and development drilling program for the 2007-08 winter drilling season. Plans are to place these 6 wells on production prior to breakup, with the gas moving through available pipelines running both east and west from this project area. Final production rates will be aggregated at that time. Dejour estimates initial production (IP) rates of at least 6 million cubic feet of natural per day from these wells.
Dejour has at least 4 additional drill sites on these 100% owned lands at Drake for future development. The Company is exploring the possibilities of further significantly greater exposure to natural gas productivity in this area.
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