Dynamic Oil Outlines NE British Columbia Drilling Program
Dynamic and partners recently acquired a total of 22,685 acres of petroleum and natural gas rights at the March 26th British Columbia Government Land Sale for a gross bonus consideration of $5.5 million. Dynamic's net working interest share of the acquired lands is 32.5%. This brings our total land holdings in the Sikanni area to 39,609 gross acres at a weighted average working interest of 34%. Farm-in lands earned by drilling, subject to a gross overriding royalty until payout, are included in the total.
We plan, with partners, to continue an aggressive land acquisition strategy under our expanded area of mutual interest encompassing approximately 750,000 acres. We have assembled a large, 2-D seismic database on the lands and our staff has mapped multiple prospect fairways on which the land strategy was based. Our interpretation has resulted in the identification of more than 20 potential exploration and development locations. We plan to drill up to six development outpost wells in 2003.
To date at Cypress/Chowade, we have drilled five exploration wells on two, separate farm-ins, targeting multi-zone Triassic reservoirs. All five wells were cased as new-pool natural gas discoveries. Initial productivity estimated by Sproule Associates Limited is in excess of 20 million cubic feet of gas per day (Mmcf/d), based on drill-stem and production testing. Using our before-payout working interest of 50%, this equates to more than 10 Mmcf/d of potential gas production, net to Dynamic.
Further completion and testing operations in zones not yet evaluated are expected to commence in the second quarter of 2003.
Gas discoveries to date justify a major expansion of the existing natural gas production and transportation facilities in the Sikanni area. Well tie-ins are already underway and are scheduled to coincide with pipeline and gas plant expansion projects. We expect to have two wells on stream this summer and three more by late fall.
Sikanni is located in the Rocky Mountain Foothills of NE British Columbia approximately 100 kms northwest of Fort St. John. The area is prospective for multiple, natural gas-bearing reservoirs of Triassic and Mississippian age.
Orion Area, NE British Columbia: Drilling operations recently commenced on our Orion property in NE British Columbia. We are drilling a 2,300-metre horizontal well to test for natural gas potential in the Jean Marie formation. The well 'spudded' in late-March and is expected to take a month to drill. Dynamic is operating the well and drilling on 100%-owned lands.
In the past few months, we have accumulated an additional 36,204 gross acres of crown lands at Orion, bringing our total holdings in the region to 66,404 gross acres. Our weighted average working interest in these lands is 70%. A portion of these lands, comprising 39,148 gross acres are owned jointly by Dynamic (50%) and a large, independent Canadian oil and gas company. We own a 100% working interest in the balance.
Orion is located approximately 60 kms west of the Alberta border and 120 kms south of the Northwest Territories in the Greater Sierra area, 200 kms northeast of Sikanni.
Dynamic Oil & Gas, Inc. is a Canadian based energy company engaged in the production and exploration of Western Canada's natural gas and oil reserves. Dynamic owns working interests in several central Alberta producing properties, and in early-stage exploration properties located in southwestern and northern British Columbia.