Junex has provided information regarding the progress of its 2008-2009 exploration program. This $10 million program, whose principal goal is to evaluate the natural gas potential of the Lorraine and Utica formations Shales as well as the natural gas potential of the Trenton / Black River carbonates on Junex's lands in the Saint Lawrence Lowlands, includes the drilling of 5 to 7 exploration wells, the acquisition of about 200 line-kilometers of 2D seismic data, acquisition of high-resolution aeromagnetic data and the analysis of the geological characteristics of the Lorraine and Utica Shales. The Company's goal in these activities is to add value to its asset base where it holds rights at 100% working interest.
Junex St-Antoine-sur-Richelieu #1 Well - Upcoming Tests
The Junex St-Antoine-sur-Richelieu #1 well, situated in the Contrecour area about 55 kilometers from Montreal, started drilling operations in late June 2008. The primary target of the well was to test a fault-bounded "sag" zone in the Trenton / Black River that was identified on seismic data.
Drilled with the Company's Foragaz #2 drilling rig, the well reached a total depth of 1,475 meters in the Potsdam Formation. Natural gas shows were recorded during the drilling of portions of the Lorraine Shale, the Utica Shale, Trenton / Black River carbonates, Chazy carbonates, Beekmantown carbonates, and Potsdam clastics. After being logged, a wellhead was installed and the Foragaz #2 drilling rig was moved to the Becancour #9 well location.
The Company's Foragaz #1 rig will be moved onto the Junex St-Antoine-sur-Richelieu #1 well in the next couple of weeks to test a number of prospective reservoir intervals identified in the deeper formations of the well. In regards to the Shale sections, Junex has provided its partner with all geological and logging information derived from the well. Such information will be used by the partner in deciding whether or not to exercise the option to perform the work commitments. Junex's partner has a 30-day period of time to inform Junex of its decision.
Junex St-Augustin-de-Desmaures #1 Exploration Well - Encouraging Results
The Junex St-Augustin-de-Desmaures #1 exploration well, located about 20 km west of Quebec City on the north shore of the Saint Lawrence River, had as its principal objective the coring and analysis of the Lorraine and Utica potential Shale Gas zones.
This well, which commenced drilling on June 16, 2008, reached a total depth of 837 meters in the Precambrian on July 23, 2008. Gas shows were observed during the drilling of sections of the Lorraine and Utica Shales, as well as the Trenton / Black River and the Potsdam formations. A total of four, 9 meter-long cores were cut in the prospective Shale section, each of which was based on the presence of organic-rich shale in drill cuttings and the presence of gas shows.
One of these cores was cut in the Lorraine Formation and three were cut in the Utica Formation; these have been sent to CBM Solutions for laboratory analysis and final lab results are expected in the next two to five months. The well was drilled deeper to the top of the Precambrian to obtain more geologic information about the Trenton / Black River carbonates and Potsdam clastic sediments.
Well logs, subsequent tests, and production logging has confirmed: (1) the presence of gas in the Lorraine and Utica Shale sections, (2) the presence of gas in the Trenton / Black River, and (3), the presence of reservoir sands in the Potsdam and the presence of a potential tight gas sand in this interval as well. A wellhead has been installed on the well and Junex plans to return to perform more work on the well in the future. Given the encouraging results of this well, the Company plans to acquire additional 2D seismic data in the St-Augustin region.
Junex Becancour #9 Exploration Well
The Junex Becancour #9 well, located on the south shore of the Saint Lawrence River opposite Trois Rivieres, will be drilled using the Foragaz #2 drilling rig. The primary target of this well Trenton / Black River carbonates associated with a seismically-defined structure. The Company forecasts the estimated total depth to be 2,000 meters.
This well will be drilling through the overlying Lorraine and Utica Shale sequence that are subject to an agreement signed with a partner (see press release dated May 15, 2007). Junex holds 100% of the rights in the overburden overlying the Lorraine and Utica Shale sequence and holds 100% of the rights in the Trenton / Black River and older sequence that underlie the Lorraine and Utica Shale sequence.
The 200 line-kilometer 2D seismic survey is planned to start in the early part of September. Conquest Seismic Services has been contracted to acquire the seismic data for the Company. A large portion of this survey is planned over the Company's Lyster permits in the Saint Lawrence Lowlands, where Junex sampled selected portions of the Shale sequence from nearby wells for thermal maturity laboratory analysis; preliminary results from this lab work indicate that these samples appear to be in the gas window. Considering this, the Company's believes that the 100% Junex-held lands are prospective for potential Shale Gas resources and the Company has planned its seismic program accordingly.
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