Petrobank Closes SE Saskatchewan Acquisition
Petrobank Energy and Resources Ltd. has closed its previously announced acquisition of additional land and reserves in the Bakken light oil resource play. On Tuesday, it acquired a 50% working interest in certain producing properties in the Viewfield/Stoughton area of southeast Saskatchewan, with extensive undeveloped acreage and an ongoing farm-in with a third party, for $8.5 million.
The Acquisition enhances the core of Petrobank's recently expanded position on the Bakken light oil play in southeast Saskatchewan. Under the original farm-in agreement related to the Acquisition, the previous operator drilled four (2.0 net) Bakken horizontal oil wells, which are currently producing 80 (40 net) barrels of oil/day. The Acquisition includes 9,426 (4,813 net) undeveloped acres and we have the potential to earn a further 13,598 (6,799 net) acres with additional drilling. In a reserve report dated effective December 31, 2006, McDaniel and Associates Consultants Ltd. assigned total proved reserves of 251,000 barrels, and total proved plus probable reserves of 730,000 barrels, to these acquired lands.
Petrobank plans to fracture stimulate the existing four producing wells and drill additional Bakken horizontal oil wells to earn the remainder of the lands. These lands are located within the core of our Bakken fairway, and are contiguous with our existing land position. Inclusive of the 41,800 acres acquired at the Saskatchewan crown land sale in April 2007, our acreage position on the Bakken fairway is now approximately 138,000 (114,000 net) acres.
The addition of these lands obtained through the Acquisition further enhances our ability to build critical operating mass in the area, which allows us to optimize our facilities for production of oil and also the ultimate recovery of significant volumes of solution gas and natural gas liquids from our Bakken wells. Petrobank currently has two drilling rigs working our Bakken lands and we plan to increase this to four rigs by the third quarter of this year.
All recently acquired lands are highly prospective for Bakken light oil and are expected to yield up to four horizontal wells per section (one section equals 640 acres). Currently, we estimate our Bakken drilling inventory at 550 (500 net) wells. With these recent acquisitions, the Bakken light oil resource play is expected to be our Canadian Business Unit's primary focus area in 2007 and for years to come. Our highly effective Bakken drilling and stimulation program, along with the expansion of our land base, has strategically positioned Petrobank to be a key Bakken light oil player.
Petrobank Energy and Resources Ltd. is a Calgary-based oil and natural gas exploration and production company with operations in western Canada and Colombia. The Company operates high-impact projects through three business units. The Canadian Business Unit is developing a solid production platform from low risk gas opportunities in central Alberta and an extensive inventory of Bakken light oil locations in southeast Saskatchewan, complemented by new exploration projects and a large undeveloped land base. The Latin American Business Unit is operated by Petrobank's 80.7% owned, TSX-listed subsidiary, Petrominerales Ltd. (trading symbol: PMG), which produces oil through two Incremental Production Contracts in Colombia and has exploration contracts covering 1.5 million acres in the Llanos and Putumayo Basins. WHITESANDS Insitu Ltd., Petrobank's 84% owned subsidiary, owns 39,680 acres of oil sands leases with an estimated 2.6 billion barrels of gross bitumen-in-place and operates the WHITESANDS project, which is field-demonstrating Petrobank's patented THAI heavy oil recovery process. THAI is an evolutionary in situ combustion technology for the recovery of bitumen and heavy oil that integrates existing proven technologies and provides the opportunity to create a step-change in the development of heavy oil resources globally.
- Petrobank Releases Whitesands Public Disclosure for May River Project (Jan 04)
- Petrobank Closes SE Saskatchewan Acquisition (May 02)
- Petrobank Bullish About Bakken (Apr 09)