Forest Gate reported that it will focus on its Rush Lake oil prospect in Cedar Valley, Iron County, Utah, during the immediate term.
As previously announced in the initial December 9, 2009 and subsequent January 19, 2010 Forest Gate news releases, the Rush Lake prospect is a shallow-drilling target, and is a re-drill target to a 1948 Dakota Sandstone discovery made at a depth of 2800 feet and never put into production.
This Rush Lake prospect is based on by-passed pay from well logs. A re-assessment of published regional geological and seismic data has led to the identification of a potentially larger Dakota play.
The initial 5000-foot well will test the Dakota Formation and a deeper Navajo target at a cost of $800,000, or $1.2 million if completed. Permitting applications for drilling at the Rush Lake prospect have been filed.
As a result of this change in strategy, Forest Gate will not be pursuing the well recompletion project (announced on April 6, 2010) in Grand County, Utah, and will instead apply all of its resources to the development of Iron County, Utah, where Forest Gate owns 121,000 gross acres (30,500 net) in this prospect area.
"We realized that we could create more value for the company by drilling in an area where we have a substantially larger land position," said Michael Judson, Forest Gate's Chief Executive Officer.
In other news, Forest Gate wishes to announce the departure of Mr. Donald Vandergrift, who was formerly the company's President and Chief Operating Officer. Mr. Vandergrift has also resigned as a director of the company.
Mr. Vandergrift, through his private company Vanterra Energy, will remain operator on Forest Gate's Rush Lake prospect.
"Don has been helpful in enabling Forest Gate to acquire the company's significant acreage positions in Utah and Arizona, and for helping source the huge library of geological and geophysical data," said Michael Judson. "As Operator on these two acreages, Don will continue to help Forest Gate unlock their value."
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