MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING TUESDAY, FEBRUARY 3, 1998 (5)
OTHER COMPANIES IN THE NEWS
AVID OIL & GAS LTD. announced the results of their first phase of winter drilling. Since December 1997, Avid has participated in the drilling of 6 (3.8 net) wells. Three of the wells were cased as oil wells, two were cased as gas wells, and one was dry and abandoned. Currently, the oil wells are being flowline connected to company owned facilities in the area, and once on, will produce about 125 bpd net to the company. The gas wells are being production tested with initial results indicating that when tied in these wells should yield 1.0-1.5 MMcfd to the company.
Avid is also pleased to announce that effective January 1, 1998 they have acquired certain producing properties in the Consort area through three separate transactions. These acquisitions bring 25 bpd of production and over 1000 acres of land to this core area for a total cost of $268,000.
Existing production, plus production obtained from new drilling and acquisitions, put Avid's total production at 190 boepd. These numbers do not include production from the gas wells as they are not anticipated to be on-stream until spring.
Avid will be participating in the drilling of four more wells scheduled to begin in late February. Two of these wells are follow up development locations and two are new pool tests. Avid has completed the shooting of a six section 3D program in Consort and exploration drilling is anticipated to begin in June on this program.
SUMMIT RESOURCES ( TSE/ SUI), following a successful fourth quarter 1997 drilling program in the Williston Basin, reported 1998 success with two light oil discoveries. An 11,300 foot test well drilled on Summit's 41 per cent working interest Neilsen prospect in Sheridan County, Montana has been completed in the Red River formation. The Neilsen #13-35 located in the SWSW Section 35-T34N-R57E test well
flowed 39 degree API oil at rates of 540 BOPD on initial test, and iscurrently on production as a flowing oil well with production rates of 400 BOPD. The Neilsen prospect is part of Summit's Big Sky
northeastern Montana project area where the Company holds 75,000 acres (50,000 net acres).
A second discovery encountered 36 degree API oil in the Duperow formation at 11,200 feet in Golden Valley County, North Dakota. The Williamson Federal #42-26R located in the SENE Section 26-T143N-R103W is held 100 per cent by Summit, and has been placed on production at a rate of 190 BOPD. The #42-26R well is also a commercial producer in the Red River formation which will be commingled with the Duperow at a later date once formation pressures are equalized. These recent successes are part of a 30 well (25 net wells) drilling program planned by Summit in 1998 on 377,000 undeveloped gross acres (210,000 net acres) held in North Dakota and Montana.
PRISIM PETROLEUM LTD. announced the company has concluded the purchase of a 100% interest in a producing gas property in the Atlee field in southeastern Alberta. The acquisition will increase Prism's proven reserves and production rate by about 75% and 35% respectively. Prism's net Operating Revenues before G & A and Interest payments are projected to increase by approximately 40% to $3,100,000 in 1998. The property includes 87 producing gas wells and a processing plant and has substantial upside development potential. The effective date of the transaction was January 1, 1998. The acquisition was funded by cash payments of $4,500,000 plus 4,500,000 shares of Prism common stock.
CALAHOO PETROLEUM LTD. (TSE/CLX) reported the drilling of a total of 9 gross wells (7.5 net) in the fourth quarter on its operated core properties. The drilling has resulted in 3 gas wells, 4 oil wells and 2 D&A, for an overall success ratio of 78%. In northeast BC at Fort St. John and Stoddart, two 100% wells are now producing, adding approximately 120 boepd to Calahoo's production. In Alberta, Calahoo has recently tied in a 100% gas well at Sedalia. The well is producing 500 mcfd at a restricted drawdown. At Nevis, Calahoo drilled and completed a 50% Manville oil well and a 50% Belly River gas well. Following the installation of a booster compressor, the Company expects to be producing approximately 70 boepd from the Nevis area. At Earring, in NW Alberta, Calahoo cased two 100% oil wells. Completion
operations are currently underway. The wells are expected to add 80 bpd of oil production.
The Company has embarked on a aggressive first quarter drilling program targeting 35 wells at Haro/Boyer and 6 wells in northeast BC. To date, Calahoo has drilled and cased 5 wells in the Haro/Boyer area. A second rig has recently been moved into the area. Calahoo expects the majority of the wells to be drilled in February and March. An incremental 10 mmcfd of gas is forecasted to come on stream in the second quarter. In northeast BC, Calahoo has just drilled and cased two wells, and is presently drilling a third well at Stoddart. At Taylor, (south of Fort St.John), a joint venture partner has embarked on a two well program targeted for Mississippian gas. Calahoo will have an average 45% working interest in the prospects.
HEGCO CANADA INC. (ASE/HEG) announced today that the company has re-entered the El Grande well located in Arkansas and has logged the well to total depth of 12,169 feet. The information obtained from logging is currently being processed and evaluated by both the Company and Schlumberger. Preliminary analysis is consistent with Company expectations. The Company has determined to set production casing to total depth. For additional information please refer to the Material Change Report filed with the Alberta Stock Exchange on January 13, 1998. HEGCO Canada, Inc., is an Alberta Canada corporation and is an oil & gas production, servicing and drilling company operating in Oklahoma and Arkansas.
At Tracy Mountain North Dakota, BOLT ENERGY LTD. has participated in its first well which has been completed as an oil well in the Mission Canyon Formation (9000'). The Fryberg 13X-2 horizontal well production tested at rates similar to previously drilled mission Canyon horizontals in the area. Nearby producing Fryberg horizontal wells initially produce between 250 and 500 bbls of oil per day with stabilized flow rates of between 150 to 250 bbls of oil per day. Bolts interest in the Fryberg 13X-2 well is 35.496% and the well is to be placed on production within two weeks. Bolt plans to follow up the Fryberg 13X-2 well with three additional horizontal wells upon receiving government approval. Bolt holds 47.5% working interest in the balance of almost nine sections of land of which a good portion is on trend with the current producing Mission Canyon wells. Up to 10 additional horizontal step-out locations have been identified.
Bolt and its partners initially acquired the Tracy Mountain lands to exploit the Tyler Sand Formation. The Mission Canyon play is in addition to the original Tyler concept. Bolt and its partners are scheduled to drill a vertical Tyler Sand well (7000') which also could prove to be a significant oil producer. Tyler oil wells produce both north and south offsetting Bolt lands. The Tyler well should spud as soon as government approval is attained.
At Sturgeon Lake, Alberta the 4-9-71-23W5M well drilled Sept/97 (Bolt 20%) is being produced at rates of 200 bbls/d of 42 degrees API oil, and 1 mmcf/d of gas and no water. At Enchant, Alberta the 7-8-13-7
W4M horizontal re-entry well drilled in Nov/97 (Bolt 80% BPO) tested gas at a final rate of 700 mcf/d and should be placed on production shortly as the well is already tied-in. Since October 1996 Bolt has participated in 10 gross, (2.75) net wells of which 8 were cased as potential oil or gas wells (80% success rate).
APF ENERGY INC. announced that it has entered into an agreement to acquire additional interests at Sundre, Alberta. It also reported that recent infill drilling at Sibbald, Alberta has led to production from
three new oil wells.
The Sundre acquisition will see APF and two other companies purchase all of the interests of Pinnacle Resources Ltd. in the area. APF's portion of the purchase price is $2,650,000. The acquisition adds daily production of 102 barrels of oil equivalent ("Boe") and 279,100 Boe of reserves, and increases APF's working interest in the property from approximately 18 percent to 26 percent . It also includes an interest in the Caroline gas plant and 12 1/4 sections of undrilled land. APF also has interests in the adjacent Caroline, Lanaway and Ricinus areas, all of which are characterized by multi-zone potential for oil, gas and natural gas liquids.
Meanwhile, the second phase of the infill drilling program at the Sibbald Oil Unit No. 1 has been completed. Nine wells were drilled resulting in six oil wells, two suspended wells and one dry hole. Four of the wells are currently on production at a rate of 45 Bbls/day net to APF's 16.3 percent working interest. The other two oil wells will be put on production once facilities are upgraded.
NEW ENERGY WEST CORPORATION (N.E.W.) (ASE/NEC) is pleased to announce that it has entered into the three following Participation Agreements:
Millarville/Quirk Creek Area, alberta.
N.E.W. has entered into an agreement with a major oil and gas company to participate in the drilling of a test well on the farmout lands. The farmout lands consist of three blocks of land, block A, B and C. Under the agreement N.E.W. is responsible for 10% of the costs of drilling the test well. Upon having participated in drilling in the test well to the specified contract depth, tested same and either completed or abandoned such test well in accordance with the provisions of the participation agreements, N.E.W. will have earned an undivided working interest in the farmout lands as follows:
Block A Lands 5% Block B Lands 7.5% Block C Lands 5%
Elmworth Area, Alberta
N.E.W. has entered into an agreement with an intermediate oil and gas company to participate in the drilling of a test well on the farmout lands. Under the agreement, N.E.W. is responsible for 10% of the costs of drilling the test well. Upon having participated in drilling the test well to the specified contract depth, tested same and either completed or abandoned such test well in accordance with the provisions of the participation agreement, N.E.W. will have entered an undivided 7.5% working interest in the farmout lands.
Blackhawk Area, British Columbia
N.E.W. has entered into an agreement with an intermediate oil and gas company to participate in the drilling of a test well on the farmout lands. Under the agreement, N.E.W. is responsible for 10% of the costs of drilling the test well. Upon having participated in drilling the test well to the specified contract depth, tested same and either completed or abandoned such Test Well in accordance with the provisions of the participation agreement, N.E.W. will have earned an undivided 7.5% working interest in the farmout lands.
General
N.E.W. estimates that its costs for participating in the above described test wells will be approximately $1,400,000.
In order to finance N.E.W.'s obligations under the above described participation agreements, N.E.W. intends to complete a private placement ("Private Placement") of a minimum of 2,000,000 and a maximum of 8,000,000 common shares of N.E.W. at a price of $0.25 per share for gross proceeds of $500,000 and $2,000,000, respectively, in an arm's length private placement to investors pursuant to applicable securities act exemptions. N.E.W. may engage registered dealers in the Province of Alberta to assist N.E.W. in the Private Placement and intends to pay the registered dealers a commission of up to 10%. The price per common share was established by the board of directors of N.E.W. The completion of the Private Placement is subject to regulatory approval and N.E.W. is required to file a formal application with The Alberta Stock Exchange within 14 calender days of this press release.
OPAL ENERGY INC. ('OPE/TSE) announced that it has closed its previously announced asset purchase from Tarragon Oil & Gas Ltd. in the Gilby area of west central Alberta. This strategic acquisition enlarges Opal's position in the Gilby area to almost 20,000 net acres and adds reserves and production of 658 MBOE and approximately 170 BOE per day respectively. Previously shut-in gas is now being processed at the new Opal 12.5 MMcf per day facility which will soon be processing incremental third party gas. Exploitation and exploration work is also underway with plans to drill three wells at Gilby in the first quarter.
In 1997 Opal successfully drilled 20 of 24 wells (17 oil, 3 gas and dry), for a success rate of 83 percent. Opal continues to achieve drilling success early in 1998. Of the three wells drilled to date, two have been cased resulting in one light oil well (.40 net) one gas well (1.0 net) and one dry hole (1.0 net).
Opal will drill 8 more wells in the first quarter which constitute part of the 1998 capital expenditure budget of almost $20.0 million.
Current production is 2,200 BOE per day with significant new discovery production scheduled for delivery later in the first quarter.
BENZ ENERGY LTD. (VSE/BZG) is pleased to announce that its East Morgantown Prospect located in Marion County, Mississippi, has been drilled and logged to its intended depth of 21,224 feet. The well is scheduled to be completed in the Lower Hosston and Upper Cotton Valley sands between 18,592 feet and 19,156 feet. The Company anticipates results in approximately 45 days.
Benz has a 36.5% working interest in approximately 4,160 gross acres in the prospect. Additionally, Benz has a 50.5% working interest in the offset prospect, Greens Creek, which encompasses 3,840 gross acres.
Prentis B. Tomlinson, Chairman and CEO, said, "A discovery in the East Morgantown Prospect could have a significant impact on Benz since the Company has a 36.5% interest in the prospect and our Greens Creek Prospect is in the same formation."
Benz Energy Ltd. is an exploration and development oil and gas company based in Houston, Texas, focused on the onshore Gulf Coast of the U.S. Benz acquires and utilizes an extensive base of 3-D seismic data, maintains significant acreage positions in its projects, and currently has an inventory of 28 exploration prospects.
OILTEC RESOURCES LTD. . (TSE/OLT) is pleased to report that ongoing drill-stem testing (DST) of its fourth Red River well (100% WI) at Weir Hill, Saskatchewan is yielding positive results. Oiltec will install production casing in the well upon completion of the DSTs. Extended production testing, as performed on the first two Red River successes, is required before the well's long-term capability is reported.
Oiltec will be moving the drilling rig from the Weir Hill location to a fifth, licensed location in the Mansur area (36% WI). The Company is also participating (30% WI) in a sixth, non-operated Red River target that should be drilling within a week.
CHERRYHILL RESOURCES INC. announced that it has signed a non-binding Letter of Intent to acquire various oil properties in the Rocanville area of Saskatchewan for a cash consideration of $300,000. These properties consist of working interests ranging between 40-100% in four producing oil wells and a 2.607% interest in the recently-formed Rocanville Bakken Sand Voluntary Unit No. 2. An independent engineering evaluation prepared as at January 1, 1998 by McDaniel & Associates Consultants Ltd. for these properties reports a net present value, using constant pricing assumptions, of $598,200 for proven reserves ($690,000 for proven plus 50% probable), discounted at 15%. The net present value, based on escalated pricing and discounted at 15%, is $569,200 ($662,000 for proven plus 50% probable). Total production is estimated to be 40 barrels per day of oil. This transaction, which is at non-arm's length, is expected to constitute Cherryhill's Major Transaction, and will require regulatory and minority shareholder approval. Closing is scheduled to occur in early April, 1998.
HIGH PLAINS ENERGY INC. announced through its wholly owned American subsidiary, 'Griffon Petroleum Inc., that the first of a twelve well multi-well shallow gas in-fill development program on the Corporations Kevin-Sunburst Dome, Montana, properties will be commenced to-morrow, February 3, 1998. These wells will exploit Cretaceous Bow Island and Sunburst Sand Developments as well as Jurassic Swift Sands and will be immediately tied in to our existing gathering and processing facility. The program will be joint ventured with Jersey Petroleum Inc., of Vancouver, B.C., which will participate in all of the wells in this multi-well program. Inceptual deliverability per well is estimated by the Corporation's consulting engineers at approximately 200 MCFD with payout estimated in months into a full year market contract. A second and third multi-well program is being planned for other properties in two other adjacent gas fields.
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