Kerms Korner / Tier II Portfolio Material Changes
TIER II Additions (Part I)
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Current Cash Position $ 65,851.34 prior To Purchases
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Devlan Exploration Inc.
DXI – 1200 Shares @ $1.66
Total Invested $1.992.00
Devlan continues to build a solid base of opportunities in both Alberta and on their extensive Northwest Territories acreage to explore and exploit for many years to come. The opportunities that the company generates range from the immediate to the long term.
For the third quarter, Devlan Exploration Inc. announced that it increased its cash flow from operations by 78% over the second quarter with a 46% increase in production.
On February 6 2003, Devlan Exploration Inc. announced it had sustained a 100% success rate in the second phase of its previously announced winter drilling program.
In the Rainbow Lake area, a total of ten (net 5.4) wells have been drilled resulting in four (net 2.3) Keg River oil wells and six (net 3.1) Bluesky gas wells. To date the first three Keg River oil wells are producing 484 (net 176) barrels of oil per day ("bopd") and the fourth will be on production this week at an anticipated rate of 200 (net 200) bopd.
The six Bluesky gas wells are part of a group of wells that will be completed and tied in concurrently to reduce costs. In aggregate, Devlan anticipates 1,500 mcfd of additional sweet gas production from these wells to be tied into the company's operated facility at 13-36-111-6-W6 before the end of the 4th quarter.
All of the 12.7 km of associated pipelines have been surveyed and construction is expected to commence late February.
In addition to the last two Keg River wells being drilled in the third phase, the company has identified another two Bluesky locations to drill, bringing the total to 14 wells being drilled in Rainbow Lake this winter.
The combined incremental production is expected to increase Devlan's daily production to 2,550 barrels of oil equivalent per day (6:1) by the end of the first quarter, a 52% increase over the Q1, 2002 exit rate.
In addition to its successes in Rainbow Lake, Devlan installed a booster compressor at Cadotte Lake and tied in a second well through a newly constructed 1.5 km pipeline. The current daily production in this area is 1,000 mcfd. A third well, on an adjacent location, is scheduled to be drilled in the fourth phase of the winter program.
In the Northwest Territories the Tree River C-36 well was spudded on January 30th and is currently drilling ahead at a depth of 478 meters. This location targets a new feature penetrating a number of prospective geological horizons to a depth of 1,890 meters. Completion operations on Tree River B-10 are underway. This is the first of three wells, drilled in the 2000/2001 drilling season, being tested concurrently with the current drilling operations.
I am in the process of obtaining financial and operational information forecasted for 2003. Current information can be found at the below location.
SEDAR sedar.com
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TriQuest Energy Corp.
TRI – 800 Shares @ $3.61
Total Invested $2,888.00
During the quarter ended September 30, 2002, the company produced natural gas at a rate of 9.60 mmcf/d, and oil and natural gas liquids at 83 b/d. On an oil equivalency basis, the average production during the quarter was 1,685 boe/d compared to 1,424 boe/d during Q2-2002, an 18% increase. On a year-over-year basis, the Q3-2002 rate was 3.4 times the Q3-2001 rate of 494 boe/d. The September production rate was 1,700 boe/d, with the company's current production rate at 1,800 boe/d and an additional 250 - 300 boe/d of shut-in capability.
TriQuest plans to drill 111 wells in 2003.. The capital budget for these activities on a working interest, risked basis is approximately $23 million. This amount is sufficient to pay for all of the 51 firm drilling locations and a risked portion of the 60 contingent drilling locations.
TriQuest management expects average natural gas production to range from 13.2 to 14.4 mmcf per day and average oil and natural gas liquids production to range from 100 to 200 bbls per day. This represents a production mix of approximately 93% natural gas at a 6 to 1 conversion ratio. Management estimates that 2002 natural gas production averaged approximately 8.1 mmcf per day and oil and natural gas liquids production averaged 71 bbls per day.
Funds generated from operations combined with proceeds from the company's unused $10 million credit facility will finance TriQuest's drilling initiatives and ongoing operations for 2003. Considering the operational program for the year, year-end debt for 2003 is expected to be less than one times trailing cash flow.
SEDAR sedar.com
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Viracocha Energy Inc.
VCA – 1000 Shares @$1.85/share
Total Invested $1,850.00
The company obtained a listing on the Toronto Stock Exchange ('TSX') and commenced trading on October 8, 2002.
On July 16, 2002, the Company acquired Rozsa Petroleum Ltd., a private company involved in the exploration, development and production of oil and natural gas in Western Canada for a total purchase price of $28,876,950. The acquisition resulted in the company establishing a strategic core area to further develop and build upon.
In January 2003, the company announced it closed the acquisition of a private oil and gas company. Consideration paid by Viracocha included $15.0 million cash, 5.5 million Class A common shares and 0.5 million warrants to purchase common shares at $1.35 per share.
The Management team of Viracocha is as follows:
Rob Zakresky - President & CEO, Rob Jepson -VP Land, Rick Marshall-VP Operations & COO, Greg Fisher-VP Finance & CFO, Gary Anderson -VP Heavy Oil, Jeff Peterson -VP Exploration, Weldon Dueck -Manager, Acquisitions and Ian Page -Manager, Business Development.
Messrs. Zakresky, Jepson, Fisher, Anderson, Peterson, and Page previously formed part of the management team of Bellator Exploration
SEDAR
sedar.com
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Current Cash Position $ 59,129.34 After Purchases
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