Dejour has continued significant drilling success in Canada's Peace River Arch, continues to target more than 10 million cubic feet natural gas equivalent per day (mmcfe/d) production from current operations in this area and witnesses natural gas prices rising materially.
Dejour has now successfully drilled and cased the #5 well at its Drake Project. Production testing of the Halfway sands showed rates of greater than 1.6 million cubic feet of natural gas per day, without any stimulation. The Notikewin zone will be tested shortly.
Well #6 at its Drake Project has now reached total depth and has been cased. Evaluation of the prospective zones will commence later this week.
Dejour owns an undivided 100% interest in both these wells and adjacent lands.
The #6 well will conclude the Drake exploration and development drilling program for the 2007-08 winter drilling season. Plans are to place these six 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, however, Pipeline construction continues at Drake.
As previously mentioned, Dejour has as many as four additional drill sites on these 100% owned lands for future development. The company is exploring the possibilities of further significantly greater exposure to natural gas productivity in this area.
The drill rig from the #6 well at Drake has been moved to the Alberta site of the company's sixth and final exploration well of the season, a 5500' test of a prominent channel sand known to be prolific in the area. Drilling operations have commenced.
Cumulative results of this exploration program will be forthcoming as results are available. To date, one of the new discoveries has tested over three million cubic feet of natural gas per day with over 150 barrels of light oil (Dejour 100%). Two additional exploratory wells show strong indications of hydrocarbons on the logs and are currently being evaluated for production. Rates will be published when available.
Finally, Dejour's, third party operated 30% owned Saddle Hills discovery is now being placed on production (two zones tested greater than 1.6 million cubic feet of natural gas). An offset well is to commence drilling this winter season. The company is currently preparing to record a seismic program to assist in future development.
A 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.
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