Excelsior has completed this winter's core well delineation program on the Hangingstone property. The program was completed ahead of schedule and on budget. A total of 29 core wells were drilled further delineating three of five areas that encountered thick net bitumen pay during the Company's 2007-2008 winter drilling program.
"We are very pleased with the coring results this winter and we have achieved all of our program objectives" commented David Winter, Excelsior's President and CEO, "We have obtained all the data necessary to support our proprietary COGD in situ combustion experimental pilot application. We have further delineated two additional areas discovered last year. These greatly expand the area of thick bitumen sands and confirm the excellent resource potential at Hangingstone"
South East Area:
Eleven core wells were drilled to delineate an area of thick McMurray Formation bitumen sands. Initial log analyses indicate between 13.5 meters and 31.5 meters of net continuous bitumen pay using a 27% porosity and 20 ohm-meter resistivity (approximates to 6% weight bitumen) cut-off, ("Net Pay"). Average Net Pay was 22.7 meters. Two of the wells targeted the edge of the McMurray sand channel system interpreted on seismic data and confirmed the geological model by encountering thin channel sands less than 10 meters of Net Pay.
Two further wells were drilled to the west of the seismic anomaly defining the focus area sand channel system. They encountered thick bitumen bearing sands that were interrupted by shale layers such that continuous sand sections were less than 10 meters of Net Pay
The wells also confirmed the presence of more than 70 meters of homogeneous shales of the Clearwater Formation which comprise the critical cap-rock above the McMurray required to seal potential thermal recovery processes. Detailed geotechnical work is nearing completion and results so far demonstrate excellent cap-rock integrity.
Furthermore, an excellent water source has been confirmed and tested flowing over 1,250 barrels of water per day. With an appropriate water completion the acquifer is estimated to be capable of flowing in excess of 3,000 barrels of water per day per well. Fluid analysis indicates the water to be a brine which will allow Excelsior to avoid the use of fresh water in a thermal project
Nine core wells were drilled to further delineate a four section area of thick net bitumen pay discovered last season. Initial log analyses indicate between 14.0 and 34.0 meters of Net Pay. Average Net Pay was 23.1 meters. Two of the wells encountered less than 10 meters of Net Pay and thereby delineate the northern edge of the sand channel system. The boundary of the thick sand channel system remains unknown on three sides and provides upside potential for further delineation.
Seven core wells were drilled in this area and greatly extended the area of thick McMurray net bitumen sands. Initial log analyses indicate between 12.0 and 24.0 meters of Net Pay and an average Net Pay of 19.4 meters. Three of the wells drilled external to the seismic anomaly that was interpreted to define a thick sand channel system encountered Net Pay of less than 10 meters thereby delineate the eastern edge of the sand channel system and confirmed the geological model. The boundaries of the sand channel system area remain unknown on three sides providing upside potential for further delineation.
The Company currently has remaining working capital of approximately $3 million to support corporate objectives through 2010.
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