Dejour Primed for Piceance-Uinta Campaign
Dejour Enterprises Ltd.'s Chairmand & CEO, Robert L. Hodgkinson, has issued an update on the Company's exploration & production operations in the Piceance and Uinta Basins of Colorado and Utah.
North Barcus Creek - Rio Blanco Project Area
Dejour has been informed by its operating partner, Retamco Operating, Inc. ("Retamco"), that all appropriate permits have been secured from the Colorado Bureau of Land Management (BLM) and the Colorado Oil and Gas Conservation Board to drill the first 2 wells at North Barcus Creek.(#1-12N and #2-12N), except for the final approval of the pit liner leak detection system which is expected within the next two weeks. Drill site preparation should be concluded by August 15/07 at which point drilling operations will commence.
The 1,600 acre North Barcus Creek lease block lies directly between a large Exxon lease block directly to the east and a large lease block owned by EnCana to the west. The Exxon lands host four recent natural gas resource discoveries drilled by Williams Cos. immediately offsetting the Company's North Barcus Creek leases. The EnCana lands are part of a $400 million USD earn-in joint venture ($40,000 USD per acre) by ConocoPhillips where two rigs are continuously drilling. Production from this new development area comes from wells within 5 miles of the aforementioned drill sites.
Target depth for the two initial wells is 11,500 feet, sufficient to test over 2,000 feet of the Williams Fork (Mesa Verde) and the Upper Isles formations. Results will guide the pace and scope of future development of natural gas on this lease block. To enhance operating and cost efficiency, the Company will utilize reverse circulation rigs to the set point of surface casing, at which point a triple rig will drill each well to target depth. The operator is currently in the process of contracting drill rigs, at which point AFE's (Authorities for Expenditure) will be finalized. New pipeline capacity has recently been installed two miles to the east of this operation to handle production.
Successful completion of these two wells will lead to the drilling of the North Barcus Creek #3-12 and #4-12 wells at two additional surface location sites within the project area. Each drill site will be able to ultimately host multiple wells. Initial costs (AFE's) are estimated to be $3.8 million USD per well. Dejour retains a 25% interest in these lands and drilling program.
Roan Creek - West Grand Valley Project Area
This project area, offsetting lands owned by Williams Cos. and Occidental Petroleum, is 2 to 3 miles south of new Occidental-operated gas production with easy access and ample pipeline facility. A 'Notice of Staking' for 4 initial wells to a depth of 6,500 feet each has been submitted to the BLM with approvals expected by 15 September 2007.
Upon analysis of the production profiles of these wells, this 1,600 acre lease block could ultimately host between 20 and 80 wells (40-10 acre spacing units). AFE's through completion should approximate $2 million USD per well. Dejour also retains a 25% interest in these lands and drill program.
Tri-County Project Area
To capitalize on past exploratory activity in the Tri-County area, preparations are underway to re-enter between 1 and 4 wells drilled and cased to 5,000 feet by earlier operators and currently maintained in operable condition. Rigs will now drill to 9,500 feet to intercept the prospective conventional Dakota, Entrada and Wingate sands believed to be present at these locations. These are the same zones that comprise the existing source of production and proven reserves in the San Arroyo field 5 miles to the south.
AFE's for the deepening and testing of these wells is expected to be $500k-1mm USD per well. Dejour retains a 25% interest in these leases and drill programs.
Plateau Project Area
Dejour and its partners currently maintain a 50/50 joint venture with EnCana USA in this 1,300 acre lease block which offsets Dakota production that initially flowed over 4 million cubic feet per day from a single well. The partnership intends to notify EnCana of its plan to drill one Dakota well to a depth of 7,500 feet.
Successful Dakota production in this area should facilitate further development with 160 acre spacing units. AFE's should approximate $2 million USD per well. Dejour retains a 12.5% interest in this lease block and drill program by virtue of the EnCana involvement.
CBM Project Potential
Trending throughout numerous of the 21 project areas comprised of the 290,000 gross acres of leases held in part by Dejour (25%) are substantial deposits of Cameo coals hosting the potential for economically viable CBM projects. Dejour and partners have retained Dr. Chris Cornelius, a specialist in CBM resource development, to complete a study on the CBM potential of Company leases. Dr. Cornelius, who has headed several projects for Evergreen Resources (now Pioneer NG), a leader in development of CBM in the Piceance Basin, has targeted an initial assessment report by the end of August 2007.
Dejour Enterprises Ltd. is a micro cap Canadian company focused on oil & gas exploration with a significant indirect investment in uranium discovery. The company acquires high-impact energy assets and strategically monetizes them through partnerships and co-ventures to limit exposure and enhance returns.
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