Pemberton reported that in addition to its previously announced negotiations to acquire mineral rights in Kindersley, Saskatchewan area, the Company has signed a binding Mineral Petroleum and Natural Gas Lease and Grant Agreement to lease the subsurface mineral rights from basement to surface on an 80 acre parcel. The Company will retain 82.5% beneficial interest and will assume 100% of the drilling and completion costs inclusive of all operating, processing, transportation and production costs.
Pemberton is still in negotiations on the previously announced 840 acres (340 Ha) of land in the Kindersley, Saskatchewan and is optimistic that these negotiations will be completed shortly. The area is known for its oil rich Viking zone, which has shown high success rates for neighboring energy companies.
This area has proven to have high success rates through new horizontal drilling technologies with multistage fracturing techniques. Pemberton feels this is a well delineated/low geological risk area and management will start planning for a drilling program for the property. Development is expected to begin in the summer of 2010 and Pemberton has already received joint venture proposals on this prospect. The Company continues further negotiations for additional lands in this area.
Reflecting on Scotia Capital Resource Spotlight Report, issued on September 21, 2009, an estimated 6.0 billion bbls of oil is still in place, in the Viking formation in this area. The report states new horizontal drills in the area pay for themselves on an average of 1.3 to 1.6 years. Drilling and completion costs average $ 1.3 million, and land sales in this region can average up to $ 3625.40/Ha. Spacing units in this area allow for up to 16 vertical oil wells per section. Pemberton feels this additional asset will bring significant value to the shareholders and long term sustainability for the company.
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