Surge: Early Indications Good at Red Earth
Surge Global Energy, Inc. said that its acquisition candidate, Peace Oil Corp., has reported the results from its initial exploration program at the Red Earth Spinnaker Property in north-central Alberta. Peace holds a 30% undivided working interest in the 86,400 acres of prospective oil sands leases within the Peace River and Athabasca Oil Sands areas.
During the period between August and December 2006, Peace Oil and its partner drilled, cored and logged seven oil sands evaluation wells in the Spirit River/Bluesky formations. Six of the evaluation wells were drilled to evaluate the Bluesky formation and the seventh was drilled to evaluate the Spirit River group. The seven evaluation wells, drilled to date, cover approximately 3,840 acres of the 86,400 acres encompassing the Spinnaker property.
"We are extremely pleased with our drilling results to date,'' said Dale Fisher, President of Peace Oil. "Our seven-well coring program during the last five months achieved a 100 percent success ratio, with all seven wells intercepting the bitumen-bearing Spirit River or Bluesky formations with thicknesses ranging from 8 meters (26 ft.) to 20 meters (65 ft.) in the Bluesky. We have only begun to explore this property and based on results to date, we plan to undertake further evaluation drilling this coming year to more fully explore the potential of the property.''
During May 2006, Sproule Associates Limited, a respected third-party engineering firm, prepared an evaluation on Peace Oil's work program and the Spinnaker property. The report estimated that the Oil Sands leases constituting the Spinnaker property contain resource potential up to 2.5 billion barrels of Original Bitumen in Place (OBIP) based on Swanson's Mean. (Note that earlier reports indicated a P90 estimate of 2.0 billion barrels of OBIP).
"Based on results to date, we have a high level of confidence in the continuity and quality of this resource,'' said Mr. Jeff Cairns, P.Eng. COO of Peace Oil. "Core and fluid data analysis undertaken during the last five months gives us strong encouragement that the portion of the property evaluated to date will make an excellent area to initiate and further advance an in situ development project.''
During the next phase of its plan of development, Peace Oil and its partner plan to undertake a comprehensive seismic survey program and drill additional evaluation wells to further explore the property.
A management update of Surge and Peace Oil's exploration activities in Alberta is planned for a shareholder conference call on February 5, 2007, at 8 a.m. Pacific time.
Surge Global Energy, Inc., located in San Diego, California, is on a quest to aggregate and exploit one billion (net) barrels of OBIP of oil sands properties in the Peace River and Athabasca regions of Alberta Canada.