In addition, the Corporation continues clean-up activities on the initial seven wells tied into the gathering system in April 2003. Production remains unstable with cumulative field rates currently ranging from 200 to 250 mcf/d. After deducting the base volumes used to fuel the field compressors, sales volumes in May ranged from 125 to 175 mcf/d. It is anticipated that with the combination of further clean-up efforts and the drilling of additional wells, production volumes will increase significantly.
Finally, technical work has commenced to identify a test-well location in the Gunsight anomaly located approximately six miles north of the Palmer development area. In addition to shallow gas potential at Gunsight, a feature imaged on 2-D seismic shows a gentle fold in the Cambrian, Devonian, and Mississippian strata. A well drilled in the early 1950's penetrated the Three Forks and Lodge Pole Formations and swabbed up to 50 barrels of oil from each respective zone. A follow-up well confirmed the presence of oil in the Three Forks and Lodge Pole Formations as well as testing gas at a rate of 1.3 mmcf/d from the Madison Formation. The Corporation expects that this first test location could be drilled as early as late summer or early fall 2003.
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