Unbridled has recently performed a large acid stimulation in the Elkton formation in its 16-21 well in the Chambers play, northwest of Calgary, Alberta, Canada.
This effective acid treatment was designed jointly by management and Schlumberger. The stimulation was pumped successfully and the well flow tested at a peak rate of 4.8 million cubic feet per day ("MMcf/d") at 1,800 psi, to a final flow rate of 2.3 MMcf/d at 1,300 psi after three days. The well is shut-in for a mandatory pressure buildup test, after which time, an analysis will be performed by an independent consulting company to book reserves. This formation is believed to exist over a large portion of the Company's acreage and, based on continued success, could give rise to over 30 new drilling locations.
Importantly, Unbridled, the operator, paid 100% of the stimulation expenses in the 16-21 well and expects to yield, net of royalties, 100% of the cash flow of this well, for the medium term, due to one non performing partner and two partners electing non-participation, by way of a 500% penalty. A pipeline must be run from the well to the Conoco Phillips sales line before gas sales can begin.
The second test, planned for the Chambers area, involves the 400 ft thick Second White Specs (2WS) shale formation, at approximately 9,000 ft deep. Based on other 2WS wells producing from the formation in Alberta, a recent comprehensive third party study, including recent and historical test data in the Chambers area, management views this formation as highly prospective. This large shale formation is also expected to be within the gas window. Unbridled Energy, the operator, plans to test the shale in an existing well, using a large slickwater stimulation treatment, within the second or third quarters of 2009. Supported by third party data, management estimates, net to the company's interest, a discovered resource of over 1.6 Tcf (trillion cubic feet) of gas to exploit. A successful test in this existing vertical well will then support a more comprehensive horizontal drilling program.
Management has also identified another horizontal drilling candidate in their Chambers play, the Rock Creek formation. This formation contains a net 40 billion cubic feet (Bcf) of discovered resource, based on management estimates. During the past year, several operators, to the north of Unbridled's Chambers play, have been drilling economic horizontal wells into this formation. These successful producing wells show similar characteristics to the Rock Creek formation, under Unbridled's acreage.
Joseph Frantz Jr., President and CEO of Unbridled Energy said, "We appreciate working closely with Schlumberger on this acid frac design recently applied at our Chambers play. The joint effort enabled a controlled-rate acid fracturing treatment to be specifically designed and pumped to maximize fractures within the zone. We are pleased with the results to date."
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