By paying 40% of the estimated $1,250,000 costs to drill, Assure O&G will earn a 40% interest before payout subject to an overriding royalty (sliding scale 5-15%) and earn a 25% working interest after payout in nine sections (5,760 gross acres-1,440 net acres) of multi-zone prospective property.
The Doe Prospect area is located approximately 70 miles northwest of Grande Prairie, Alberta and approximately 6 miles east of the British Columbia/Alberta border. The prospect area is strategically positioned between two significant natural gas accumulations associated with the Upper Devonian Wabamun Group. On the British Columbia side, approximately 12 miles west, Petro-Canada's historic Parkland Wabamun 'A' pool had original gas in place of 225 billion cubic feet (BCF) and the discovery well is reported to have produced 109 BCF to date. In Alberta, approximately 12 miles east, EnCana's Gordondale area is a more recent multi-BCF discovery of natural gas associated with the Wabamun formation. About 30 miles to the south is Houston based Anadarko Petroleum's massive Saddle Hills discovery, now a core development area for Anadarko with a reported 130 billion cubic feet of gas reserves.
"This play is certainly in the right neighborhood, major producers are finding the big pools around us.' stated Harvey Lalach, President of Assure, 'But its more than that, the amount of science and technology, land costs and exploration expended on the property prior to drilling exceeds $1.5 million. Drilling almost 2 miles down is a challenge when you consider temperatures at target depth can be over 212 degrees Fahrenheit. However, we have a large and experienced lead partner in the consortium and we are using a huge triple rig to get the job done and hopefully on budget."
The Geological Survey of Canada describes the Wabamun formation in the Peace River Arch area to be a remedial ramp carbonate which has undergone hydrothermal dolomitization. The dolomitization is a result of magnesium rich fluids moving along major fault trends associated with the Peace River Arch rift basin. These dolomitized areas are the primary reservoirs for natural gas fields in the Doe Prospect region. Faulted horst structures provide the dominant trapping mechanism for gas accumulations.
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