Ranger Energy has signed a binding letter of intent, dated March 30, 2010, with an Alberta based private company, to acquire through a farm in arrangement a 100% interest in a Cardium and Viking oil project in Alberta. The lands total 8.75 sections (100% working interest) and are located in the prolific light oil Pembina field with well established Cardium and Viking production.
Significant vertical well control exists to define the project areas and multiple drilling locations have already been identified. Other operators have found multi-stage fracing in horizontal wells to be highly effective on nearby lands. The agreement commits Ranger to a 5 horizontal well drilling program and was paid for with the issuance of 2,600,000 common shares and 1,000,000 performance shares in the Corporation and the issuance of a non-convertible promissory note to the Privateco in the amount of $7.4M.
The Viking prospect area, which includes a 100% working interest in 7.25 sections, is inside and adjacent to a very prolific Viking light gravity oil field, and includes lands which have historically produced from the Viking formation. Horizontal wells with multi-stage fracing technology will exploit large reserves of by-passed oil in the field where vertical wells have established pay thicknesses averaging 7 meters and reaching 13 meters in thickness. The Corporation and its partner are finalizing details of the drilling program which is intended to begin in the near future.
The Cardium prospect area, which includes a 100% working interest in 1.5 sections, is an extension of the East Pembina unit. Several prominent operators in this immediate area have already been successful applying horizontal multi-frac well technology to the Cardium resource play.
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