Altai Resources Inc. announced that a new gas discovery in the Utica shale of the St. Lawrence Lowlands has significantly enhanced Altai's gas properties in the St Lawrence Lowlands.
A Forest Oil representative stated, "Over the last two years, Forest has accumulated approximately 269,000 net acres, under lease or farmout, in the St. Lawrence Lowlands in Quebec, Canada. Two vertical pilot wells were drilled in 2007, testing the Utica Shale, to a total depth of approximately 4,800 feet. Production rates tested up to 1 Million cfe/d. Although the play is still in the early stages, Forest believes the initial results are encouraging due to the following factors: shallow depth of the shale, rock properties are comparable to other more established shale plays, high-quality natural gas with minimal impurities, infrastructure in place with nearby access to major pipelines, and premium natural gas pricing to NYMEX makes the economics compelling.
"Forest plans to drill three horizontal wells in 2008 to refine its drilling and completion techniques. First production is expected in 2009 with the potential for a full scale drilling program in 2010 and beyond."
Altai holds varying interests in a substantial land package consisting of 315,000 acres located about 2 km west of the Forest Oil discovery wells. Altai is a majority owner (59.4% as of December 31, 2007) and operator of the property totalling 282,000 acres and holds a 8% gross royalty in 33,000 acres which was optioned to Talisman in 2005. The land package is adjacent and central to the properties of Gastem Inc., Questerre Energy Corporation and Junex Inc most of which are optioned either to Forest Oil or Talisman Energy. The underlying prospective Utica Shale extends onto Altai's property.
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