Gentry will continue to focus its energy and capital in four key areas: the Princess and Tide Lake areas of Southern Alberta; the Sedalia/Oyen area of east central Alberta; and the Whitecourt area of west central Alberta. The investment in land and seismic over the last several quarters has made it possible for Gentry to embark on a drilling program that will result in the most net wells in its corporate history. Despite the very wet spring conditions Alberta has experienced, the Company is still on target to participate in 43 wells (24 net) of which Gentry will operate approximately 70%, or 30 wells (17 net). An area breakdown of the drilling activity for the remainder of 2003 shows approximately 21 wells earmarked for the Princess and Tide Lake areas and nine wells in the Sedalia area. The majority of this drilling will be finished by the beginning of the fourth quarter. In the Whitecourt area, the Company anticipates drilling six wells prior to year-end and another six wells in the first quarter of 2004.
Princess and Tide Lake:
In addition to the aggressive drilling program that commenced May 25th, this current quarter will also see the Company breaking ground on a capital project that will result in gas flowing from its Nisku discovery of 15 months ago. The onstream date for this gas is expected to be mid-third quarter and Gentry will be announcing the planned route and infrastructure in the near future. To date, drilling in this area has resulted in a number of new pool discoveries and the requisite regulatory production restrictions have all been dealt with successfully.
As of June 1st Gentry will be operating four of its six new pools under the guidelines of GPP, with the remaining pools rate-restricted for several more weeks until GPP applications can been filed and approved. Follow-up wells targeting these same pools will fall under existing GPP and thus will not be effected by rate restrictions. In addition, further new pools will benefit from the knowledge the regulator now has of the existing production, which will hopefully streamline the regulatory process. All in all, the Company now looks at the delays and production restrictions experienced over the past 6 months as the price of success and the cost of entry into a new area.
The Company has 138 km(2) of proprietary 3D and 111 km(2) of non-proprietary 3D seismic data. All of the 21 proposed locations in this area will be drilled based on this seismic information.
Gentry's Whitecourt core area includes Goodwin, Windfall, Paddle River, Blueridge and Sakwatamau. One year ago Gentry had two sections of land in Whitecourt. The Company now controls approximately 35 sections of land in this region and has a corporate mandate for further expansion in this gas-prone area. Gentry and a partner successfully drilled a gas well in this area earlier this year resulting in first gas early in the second quarter (approximately 1.5 mmcf/d, net 0.75 mmcf/d). The Company anticipates drilling 12 wells in the Whitecourt area over the next 12 months. Drilling should commence in August.
The Company started the first of four wells in the Sedalia area on May 27th. Gentry controls approximately 34 sections of land in this area and anticipates drilling a total of nine wells in this area in the next five months. The target zones are noted for quick pay-out, fast onstream times and year-round access.