MGM to Spud Three Wells
MGM Energy expects to drill three wells this winter in the western region of the Mackenzie Delta. Each well will be an earning well pursuant to the farm-in agreement with Chevron Canada Limited and BP Canada Energy Company.
The first well, to be called Atik P-19, on Exploration License 427B, is expected to spud by the end of December 2007. The well is a 2,000-meter exploration well, designed to test the Taglu and Aklak formations.
The second well, to be called Shavilig D-42, also on Exploration License 427B, is expected to spud in late January 2008. Also an exploration well, this well is designed to test the lower Taglu and Aklak formations, to a depth of 2,000 meters.
MGM Energy's third well, to be called Langley E-07, will be drilled on Exploration License 394, and is expected to spud in late February or early March 2008. This exploration well is designed to test multiple stacked zones in the upper Taglu formation, to a depth of 1,400 meters. Drilling is expected to be complete by the end of March, 2008.
Each of the three wells is expected to be tested and completed before the end of the winter drilling season, expected to occur by mid-April, 2008.
In addition to these three wells, MGM Energy is planning three seismic programs, designed to further delineate drilling prospects or to focus further seismic acquisition. Two of the programs are pursuant to the Farm-in Agreement and include a 3D program in the North Ellice area of the western delta comprising 150 square kilometers, and a 2D program in the Ogruknang area north of Inuvik comprising 160 kilometers. The third program is another 2D program in the Kelly Lake area of the Sahtu region, north east of Norman Wells in the central Mackenzie Valley, comprising 170 kilometers.
The total cost of the three wells is estimated to be $60 million. In addition, the aggregate cost of the three seismic programs is estimated to be $34 million. The total cost of the 2007/2008 capital program will be funded from existing cash resources.
"We're excited about the prospects identified for this winter's program," said Henry Sykes, president of MGM Energy. "It's a significant logistical undertaking to ensure that we can drill and test three wells and conduct a material seismic program at the same time. We believe, though, that this level of activity is needed to minimize the costs of exploration in such a remote area of Canada. We look forward to reporting on our results as the wells are completed and tested."
MGM Energy anticipates providing updates of its drilling results as information becomes available from each well.
MGM Energy is a Calgary-based Canadian oil and gas exploration and development company with operations in Northern Canada. MGM Energy's common shares are listed on Toronto Stock Exchange under the symbol "MGX".
Operates 32 Offshore Rigs
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