FIELD ACTIVITIES / First Star Releases Information on Strachan Prospect
ASE SYMBOL: FST
SEPTEMBER 18, 1998
CALGARY, ALBERTA--First Star Energy Ltd. ("First Star") and its
partners are pleased to announce that they have made the first
significant Swan Hills/Beaverhill Lake natural gas discovery
between the Caroline and Blackstone-Hanlan area in the foothills
of Alberta.
The Strachan 2-22-38-09W5 well (formerly 3-22)(First Star 20
percent BPO, 25 percent APO) encountered 14 meters of porous
dolomitized reef in the Swan Hills formation during drilling
operations in April. During the summer months the well was acid
stimulated and initial production testing of the Swan Hills has
now been completed. During the production test the well flowed at
raw gas rates up to 10 Mmcfd with negligible water production.
The final test rate was 4.8 Mmcfd on a 5/16" choke, and a wellhead
flowing pressure of 2375 psig. Survey and permitting for the
tie-in of the well to the Strachan gas plant will begin shortly,
with an expected onstream date of January 1, 1999.
First Star previously reported (April 17, 1998), that this well
did not encounter the Leduc D-3 formation which was the primary
target at this location. However, the well has encountered a new
natural gas reservoir in the Swan Hills Formation. The revised
geological and geophysical interpretation for the prospect area,
which takes into account information from the well, suggests that
the Swan Hills formation was not drilled in the optimal position.
Whereas the well location was originally moved to match the 3-D
seismic and optimize the expected structure (Leduc D-3), it was
not the optimum location for a Swan Hills well. Therefore, the
option blocks originally designated in the farmout agreement
relative to the D-3 target do not necessarily correlate to the
Swan Hills discovery. The farmin partners have elected not to
drill the first option well on the option block specified,
although it is expected that the first development well for the
Swan Hills will be drilled in early 1999. Further drilling, both
development and exploration, will be required to determine the
full extent of the discovery.
Based on the penetration rates, gas detector reading and well
logs, a number of shallower zones, including the Mississippian and
Lower Mannville formations, appear to contain hydrocarbons in the
2-22 well. No tests of these potential zones were carried out
during the drilling operations (in order to protect the integrity
of the wellbore). A shallow well, to access these reserves, is
expected to be drilled in late 1998 or early 1999.
First Star's original acreage block, prior to the drilling of the
discovery well, consisted of 16.5 sections of P&NG rights, (10,560
gross acres). Including the September 16, 1998 sale, First Star
now has rights varying from 25 percent to 100 percent in a total
of 34 sections (21,760 gross acres) or 7430 net acres for an
average working interest of 34.2 percent on this play.
First Star is listed on the Alberta Stock Exchange with the symbol
"FST".
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