American Petro-Hunter updated details of the Company's North Oklahoma Project, and discuss the ongoing development plan for the 7 leases totaling over 1,000 acres located in Payne County, near Stillwater, Oklahoma.
Shale oil plays have become the source of considerable domestic onshore production over the past few years as the technological refinement of horizontal drilling techniques and the use of fracture stimulation programs designed to liberate the oil from the shale formations has increased dramatically. Recently, shale plays of magnitude in similar shales such as the Bakken and Green River formations are showing the best results from horizontal wells. American Petro-Hunter believes that its working interest participation in the Oklahoma project has the potential to become a large shale oil play offering stable long life reserves and predictable production.
The North Oklahoma Project has several prospective locations and the minimum 640 acres required to drill a 2,000 foot horizontal well and the operator is currently developing the engineering data and cost analysis in order to commence operations. Additionally, the Company has been presented with an opportunity to participate in another regional prospect offering a horizontal play scheduled to commence in September. The potential of a successful horizontal well in the Oklahoma shale has been estimated at between 1,000 and 1,200 barrels per day. It is the Company's goal to participate in, drill and complete wells of this magnitude which would assist in meeting our stated goals and objectives.
Regionally, significant shale oil projects have been developed within the Bakken Formation which encompasses 200,000 square miles of the subsurface of the Williston Basin, covering parts of Montana, North Dakota, and Saskatchewan, Canada. A report by the USGS estimated the amount of technically recoverable oil within the Bakken Formation at 3.0 to 4.3 billion barrels. The state of North Dakota also released a report which confirms these numbers. Along with the Green River Formation which covers portions of Colorado, Wyoming and Utah, these oil shales indicate vast reserve potential.
Currently at the North Oklahoma Project, all efforts to prove the presence of a large shale reserve have been positive. Preliminary operations and initial drill testing of the potential within a 48 foot thick shale pay zone calculated to produce commercial quantities of oil have been successful to date. The No. 1 Well has been tied in to the storage tank battery, gas lines have been connected, and a gas sample has been provided to the purchaser. As reported previously, the well was acidized and producing at 75 BPD rates. Now that the fracture stimulation program is complete, the well requires tie-in to a water disposal well prior to fully achieving the stable rates anticipated. The No. 2 and 3 Wells are currently in varied stages of work and the Company anticipates bringing additional production online in August.
Company President Robert McIntosh stated, "Our initial efforts lead us to believe that we have real potential in the Oklahoma shale. The opportunity to participate in horizontal drilling gets us on track to quickly achieve some significant production goals. All the data looks good and we know the oil is in place, so now is the time to get on with the drilling."
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