Ryland Oil's joint venture partner, TriAxon Resources Ltd., has now put on production its third farm-in well on Ryland's Bakken lands in the Flat Lake area of southeast Saskatchewan. The stimulated horizontal well, located at 1-22-1-14W2, was put on pump in August. The well is producing approximately 200 barrels of oil per day (net 100 barrels of oil per day to Ryland) with a 35% water cut and a high pumping fluid level. This is the third earning well drilled by TriAxon under the farm-out agreements, with TriAxon paying 100% of the costs to drill, complete and equip the well to earn a 50% working interest in a portion of Ryland's surrounding acreage.
Ryland is also pleased to announce that TriAxon has spud its next commitment well on Ryland's Bakken lands in southeast Saskatchewan. This earning well, being drilled under the same terms as the previous wells, is located approximately 4 miles northeast of the new producer. In addition, TriAxon has formally notified Ryland that it has elected to drill the next option well, scheduled for January, 2010, about 5 miles west of the new producer.
Based on production behavior of the new well and the projected drilling program, Ryland management is very encouraged about the Bakken development potential of the approximately 52,000 acres in the area. The drilling to date has enabled this acreage position to be converted from short term license status to long term leasehold. Ryland and TriAxon are party to three farmout agreements covering Ryland's Flat Lake acreage position. In addition to the wells referred to above, TriAxon may elect to drill another three earning wells to fully earn its farm-in rights for the Bakken Formation across this extensive acreage position.
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