Unbridled Energy Corporation provided the following update on its Appalachian Basin operations in the USA.
Ohio River Play, Ohio
Unbridled, the Operator, and its Joint Venture Partner, Equitable Production Company, a unit of Equitable Resources, Inc. have successfully drilled the three planned horizontal test wells (2500 ft. laterals) in the Lower Huron Formation of the Devonian Shales in south central Ohio. The three wells were stimulated using either seven or eight hydraulic fractures treatments and are being flow tested. This is a "Tight Hole Play" and thus information will be restricted for some period.
By drilling, fracturing, and flow testing the three wells, Equitable will earn a 50% working interest in Unbridled's approximate 26,000 acres. If the play proves economic, the Partners could drill between five and ten additional wells in 2008. The Lower Huron is the most frequently completed and produced shale formation within the Appalachian Basin. The formation is being drilled using horizontal well technology and multi-stage stimulations throughout Kentucky, West Virginia, and Virginia. The Lower Huron has not been drilled and stimulated using horizontal technology in this portion of Ohio, but the same formation is being drilled economically using horizontal wells about 30 miles south, in West Virginia, by several operators.
Marcellus Shale Play in Pennsylvania, West Virginia, and Ohio
Unbridled is in negotiations on four deals in these States including: 1) joint venturing with a large oil and gas company new to the Appalachian Basin who desires to lease acreage in Pennsylvania and team with Unbridled as a local operator, and 2) joint venturing with companies that hold existing acreage and desire a partner to offset the risks inherent in new plays or desire to earn their acreage by drilling wells. Management is working toward closing at least two of the four deals within 30 days. The Company plans to use a combination of vertical and horizontal wells and 3D seismic surveys in this new shale play.
Chautauqua Lake Properties, Chautauqua County, New York
Unbridled, the Operator and its Joint Venture Partners, have successfully drilled a total of six new wells in Ellery Township, New York, into the Medina tight gas sand formations. Four of these wells have now been successfully hydraulically fracture stimulated, of which the first well is producing into line at restricted rates of greater than 100 Mscf/d with good pressure. The other three wells are expected to be tied in a matter of days, with further production testing in line. The two remaining wells are scheduled to be hydraulically fracture stimulated within two weeks. Additional wells are being permitted for drilling in Ellery and Villenova Townships during Q3.
The Company's 2008 budget calls for the drilling of a total of 20 wells in these Townships. In addition, there are numerous existing wells that can be recompleted within certain segments of the Medina formation. Plans are underway to recomplete four wells by end of Q3. Leasing operations are currently underway to expand the Company's 13,280 acre land position. Approximately 1,000 additional acres have been leased to date.
One of the new wells drilled recently involves a project with Schlumberger Data & Consulting Services (DCS), sponsored by the New York State Energy Research and Development Authority (NYSERDA), to acquire new micro-seismic data to image the created hydraulic fracture. The project was completed, as scheduled, in May and successfully collected new reservoir and hydraulic fracture information in the Grimsby, Whirlpool, and Devonian shales in Chautauqua County. This new data will be used to optimize future hydraulic fracture treatments in view of enhancing production. Until now, the formations, in this region of New York, have not been characterized significantly. The project included collecting advanced logs, sidewall core, and micro-seismic data. Based on the project results, the Company plans to test the Marcellus and Geneseo shales in its Ellery and Villenova Township properties.
Further, the Company has agreed on terms to purchase an interest in 22 additional wells, 980 acres, and deep rights on approximately 14,000 acres which includes the Company's existing acreage where it holds all shallow rights. Additional information will be provided after closing.
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