From January of 97 Tusk Web Site
Main Producing Property - Meekwap
TUSK's November 1996 acquisition of Gulf Canada's Meekwap D-2A Unit will more than double the company's production and cash flow. The purchase will give TUSK a 16.7344% working interest and 0.87533% net profits interest in the Unit. In addition, TUSK acquired an average 40% working interest in 3,200 acres of adjacent lands. The purchase arrangement was based on an effective date of June 1, 1996 and a closing date of late November 1996. With the high oil prices during that period, TUSK required $6.7 million to close the deal, which represented $6.28 per barrel for proven plus probable.
Meekwap was discovered in 1966 with the majority of development completed in the early 1970's. Waterflooding was initiated in 1974 at which time the Meekwap Unit was formed. Additional successful drilling was done on the eastern part of the Meekwap Unit and outside the unit on its eastern flank in the mid 1980's. In addition to it's Unit interest, TUSK owns a 46% working interest in the east flank wells which it acquired in 1994. October, 1996 production from the Unit was about 2, 700 boepd. Oil gravity here is 35 degrees API. Of the estimated 85.7 million barrels of oil-in-place, approximately 33 million barrels (or 38%) have been produced to date. The ultimate recovery factor could be as high as 60% (18 million more barrels) although the AEUB currently expects a recovery of 53% (12 million more barrels). TUSK sees upside potential through the drilling of infill and stepout horizontal wells, optimization of the waterflood by adding new injection wells and cost savings through more effective operations in the field.
TUSK plans to drill up to 4 horizontal wells along the updip edge of the Meekwap Unit during 1997. The company is basing the potential success of these wells on 6 horizontal producers drilled in the past. Average first year production from the six wells was 233,000 barrels of oil per well equaling an average daily production of 638 bopd. In total, these six wells are expected to produce 3.5 million barrels of oil. TUSK drilled a horizontal well outside the eastern flank of the Meekwap unit in October 1995 and paid out the $1.1 million in drilling completion and tie on costs in 90 days. Even with the shortage of rigs in the first quarter of 1997, TUSK is expecting to get a rig by mid-February and plans to drill 2 horizontal wells by July 1997.
With the development programme at Meekwap, TUSK expects to increase overall production and realize a stable and growing cash flow for funding the company's exploration programmes.
Map 2 - Meekwap Unit
<Picture: Meekwap Unit>
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