Vista's assets are located in three operating areas: Cutbank, adjacent to Talisman's Deep Basin play, Retlaw/Enchant/Turin located in southeast Alberta and Freefight in southwest Saskatchewan. The Cutbank complex is Vista's major asset, representing two-thirds of its revenue and value. Talisman has entered into a firm agreement for the sale of the assets at Retlaw/Enchant/Turin for $30.5 million and is in negotiations for the sale of the Freefight assets.
The Cutbank complex is located 80 kilometers south of Grand Prairie between the Smokey, Cutbank and Kakwa rivers and services an area of 2,600 square kilometers in the southern part of the Deep Basin. This is an extremely active drilling area with approximately 100 wells licensed in the last 18 months. There are a number of long-term contracts in place for firm service in the Cutbank complex, which will continue to operate as an open access, midstream business.
The Cutbank complex consists of the Cutbank gas plant, the Musreau gas plant, five major field compression stations and an extensive gas gathering system. Total processing capacity is 165 mmcf/d of sweet gas with current utilization at 80%. There are currently several new wells being tied in. Throughput has increased from 70 mmcf/d in 2002 to an expected 136 mmcf/d for 2003. As development continues, utilization of the Cutbank complex is also expected to increase. With this continued growth in the area, Talisman is investigating capacity expansion opportunities to accommodate the projected increase in volumes.
The Cutbank area is relatively under explored and highly prospective. This acquisition is part of a larger strategy in the Deep Basin where Talisman holds over 213,000 net acres, with current production of almost 58 mmcf/d. Talisman acquired 1,300 square kilometers of 3D seismic in the area and has an aggressive exploration program planned, with 47 gross wells planned for 2003, and plans to drill up to 66 wells in 2004.
Talisman has recently completed a very successful gas well in the area. Elmworth 1-17-70-7W6 (TLM 100%) is located 10 kilometers southwest of Grande Prairie. The well is capable of producing in excess of 20 mmcf/d, but is restricted due to current pipeline constraints and is currently producing at 17 mmcf/d. A follow-up well on a separate anomaly is planned later this year.
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