Nevarro to Drill Five Development Wells
Nevarro, as operator, is pleased to announce the commencement of its eight well summer drilling program.
Nevarro intends to drill five development oil wells in the Aberfeldy area of Saskatchewan targeting oil production from the GP and Sparky formations. In the Mulligan area of Alberta, Nevarro has identified through a 3D seismic interpretation a direct offset one-mile north of its recent 6-12 natural gas discovery that is currently producing at steady rates of 1,400 mcf/d (Nevarro share 600 mcf/d). Nevarro will have 56% working interest in the Mulligan well. If successful, Nevarro will immediately drill a third well at Mulligan, based on the 3D seismic interpretation. Nevarro's working interest in the third well will be 69.5%. Nevarro also intends to drill a 55% working interest natural gas well in the Provost, Alberta area that will target the Belly River formation. In the Edson area of Alberta, Nevarro will drill a test well for Elkton natural gas. Nevarro will have a 25% working interest prior to payout and a 55% working interest after payout.
Nevarro has signed a Letter of Intent to acquire a 75% working interest in the Frog Lake area of Alberta for a purchase price of $750,000. After closing of this transaction, Nevarro will have an interest in 2,880 acres of land, that includes two wells that are currently producing approximately 60 boe/d and nine wells that are currently cased and awaiting completion. Upon closing of this transaction Nevarro will commence a completion program to bring on additional oil production from these wells. Nevarro's independent engineers have assigned proven oil reserves of 257,000 bbls and probable additional reserves of 246,000 bbls to the interest to be acquired.
Nevarro currently has 7,757,591 common shares outstanding and production
of approximately 550 boe/d.