Late in the fourth quarter Gentry Resources closed two asset transactions. The company divested a minor non-operated light oil asset in South East Saskatchewan; in the second transaction Gentry acquired non-operated partner interests in the Princess area, notably in the company's Tilley field. Gentry now owns 100% of the primary producing trend in the Tilley to Tide Lake area of Princess, a straight line distance of approximately 20 kilometers. The net effect of these transactions was an additional 62 boe/d plus a cash gain of $2.7 million which was applied against corporate debt.
In the Princess area, Gentry began flowing oil on January 11, 2008 through the company's recently constructed Alderson facility, located in the middle of the Princess core area. Construction of this new 10,000 bf/d facility commenced in the 3rd quarter of 2007, with water disposal approvals granted by the Energy Resources Conservation Board in late December. The company currently has 10 wells producing into this facility, most of which were drilled in the second and third quarters of 2007. With completion of the Alderson facility, Gentry's facility and gathering system now captures approximately 66 square miles of Princess lands and is expected to result in a material reduction in operating costs through a reduced reliance on trucking expenses. Gentry's focus for the past several years has been earning farm-in lands and extending its discoveries along the main Pekisko erosional edge. Future expenditures will focus on maximizing oil and gas production through existing facilities and continuing the farm-in earning.
In the fourth quarter, Gentry drilled eight wells (all 100%) resulting in three oil wells, three cased wells waiting on completion and two abandoned wells, resulting in a 75% success rate. Seven wells were drilled in the Princess area, with three being the final exploration wells required under farm-in earning provisions. One of these wells tested oil at high production rates and is being equipped as a single well battery. Four wells were drilled in the Alderson area; one has been completed as an oil well and the remaining three wells will be tested shortly. The final well was drilled at Mulligan in the Peace River Arch and has been cased and is awaiting tie-in to a company- operated battery.
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