Great Plains Hits Paydirt at Crossfire, Northeast British Columbia
Great Plains has cased its third exploratory well on its Pembina/Crossfire project as a potential Nisku oil well. The well at 14-33-50 5W5 encountered a dolomite Nisku reef with a hydrocarbon column of 11.5 meters based on log analysis and well site data. Porosity averaged 15% and ranged as high as 34%. While the well has not yet been tested, flow rates up to 1,400 BOEPD are expected based on analysis and comparison with other Nisku wells in the area, including the previous Great Plains discovery 4.5 km northeast at 11-12-51-05 W5 (26.6% to 40% working interest), which tested up to 1,400 BOEPD. Initial internal estimates for the 14-33 well (40% W.I.) indicate approximately 2.3 million barrels of original oil in place.
The 14-33 discovery is significant for two key reasons. Firstly, the 3D seismic interpretation used by Great Plains continues to be validated as the 14-33 location is the third successful Nisku test of three exploratory wells in the Crossfire area. Secondly, the success of this well combined with reserves previously identified at the 11-12 well will potentially provide the critical mass required for the construction of a pipeline to bring production on-stream from both wells. Subject to surface conditions and regulatory issues, Great Plains anticipates that pipeline construction could begin in the second half of 2009.
Commencing in late Q2, Great Plains expects to participate in an additional three Nisku wells of which two locations at Tomahawk (1-16-51-6 W5M and 9-17-51-6 W5M) are already licensed, with Great Plains holding a 25% W.I. in each well. Successful tests at these locations will allow for the tie-in of previous discoveries from 15-7-51-6 W5M (35% W.I.) which tested at 650 BOPD and 8-35-50-7 W5M (32% W.I.) which tested at 400 BOPD.
In Northeast British Columbia, Great Plains has completed its winter drilling program and is moving into the final stages of various workover, completion and pipeline projects. All of this year's earning obligations in the Company's 300,000 acre Greater Sierra exploration block have been fulfilled by the drilling of wells at Gunnel and Helmet, with one additional well required in the 2009/2010 winter drilling season. The previously announced exploratory success at Gunnel (100% W.I.) has now been stimulated with new flow rates increasing to 51 e3m3/d (1.8 MMcf/d) while the exploratory test at Helmet (50% W.I.) has been successfully cased and tested at 1 MMcf/d with tie-in operations commencing immediately. While commodity prices and reduced cash flows require that the Company curtail its capital expenditure plans for this area, we are pleased with our exploration record to-date and look forward to building on our success.
At Klua, a Keg River test was drilled through the core of a pinnacle reef which exhibited indications of porosity with completion and testing of the well scheduled for March. However, further seismic evaluation indicates that superior reservoir development may exist in the reef flank. Accordingly, Great Plains has elected to postpone its completion plan in favor of a side-track drilling operation which could take place this summer. Analog wells in the Klua area that have encountered this type of dolomitic porosity in the reef flank have been successfully completed with initial production rates of 6 to 14 MMcf/d and reserves of 6 to 14 bcf recovered to-date.
The balance of the winter program in Northeast BC is focused on inexpensive workover and optimization operations at Klua and Kotcho which are designed to maximize output in order to reduce fixed operating costs. Great Plains remains confident in the long-term economic viability of Northeast BC and approximately 10 new locations have been identified for follow-up drilling with an additional number of leads currently being evaluated.