MARKET ACTIVITY/TRADING NOTES FOR DAY ENDING THURSDAY, FEBRUARY 5, 1998 (4)
OTHER COMPANIES IN THE NEWS
The President and Chairman of HEGCO Canada Inc., Douglas C. Hewitt, announced, that because of the numerous inquiries regarding the El Grande well, the Company is providing the following update:
The well has been cased to bottom and Haliburton has completed the cementing of the production casing to total depth of 12,169 feet.
HEGCO's interpretation of the logs that were run in 1983, when the well was originally drilled, was that secondary porosity development was indicated. Upon the re-entry of the well last week, Schlumberger logged the well using imaging logs to identify secondary porosity development. The analysis of the Schlumberger logs confirms the existence of secondary porosity over significant intervals. The secondary porosity intervals are associated with gas shows. The potential of the reservoir system will be determined by production testing which will begin in three to four weeks. Until testing is complete the Company will not have any new information regarding this well. The Company will be updating the drilling program on its Oklahoma properties next week.
Commonwealth Energy Corp. announced by way of information received from Energas Resources Inc., the operator, that further to our news release of January 6, 1998, drilling of the North Glenrock Prospect is being delayed in favor of the Sapphire Prospect. Energas now has an opening to secure a larger rig capable of drilling to 12,500' on its 2,100 acre Sapphire Prospect. By drilling the Sapphire Prospect first, we have the opportunity of using the same rig for North Glenrock at a later date with possible savings in drilling costs on both wells.
The Sapphire Prospect joins the 22 million barrel Buck Draw field discovered in February of 1983, and is located in the Powder River Basin of Wyoming. Wells in Buck Draw have sustained production of oil at rates approaching 3,000 barrels per day and 5 million cubic feet per day of natural gas. Six wells in Buck Draw have produced 13,260,827 cumulative barrels of oil to date.
The initial test well on the Sapphire Prospect will be located approximately one mile from the closest well in the Buck Draw field. Drilling of this 12,500' test well is expected to commence in March of 1998. Commonwealth's participation will be a 30% working interest.
Maxwell Oil & Gas Ltd. announced that Maxwell et al Tomahawk 12-5-53-5W5M has reached total depth and is currently standing as a potential oil well in the Clarke's Member of the Banff formation.
During the month of January, the well was drilled vertically to a depth of 1,636 meters (5,367 feet) and, after penetrating Clarke's Member dolomite, intermediate casing was set. The well was then drilled horizontally for a distance of 617 meters (2,024 feet). Including the cased portion of the Clarke's Member, a total of 508 meters (1,667 feet) of Banff formation was encountered, of which 290 meters (951 feet) IS "good Porous Dolomite Pay" based on available mud log readings, bit penetration rates, geologic sample descriptions and oil shows. The Clarke's Member reservoir is described as "oil-bearing throughout", with observed porosity approaching 20 percent.
Mr. Eric Stein, Maxwell's Vice-President of Exploration is quoted as saying "we are obviously pleased with the results to date and remain cautiously optimistic that the well will meet or exceed Maxwell's original production rate expectation of 200 bopd. However, until such time as production testing is completed in late February, we just don't know what this well is capable of. What we do know is that offset VERTICAL wells initially produce in the 80 - 100 bopd range from 3 meters (10 feet) of Banff formation and if you apply a horizontal to vertical well performance ratio between 2 and 5 to the Maxwell 12-5 HORIZONTAL well, initial rates in the 160 to 500 bopd range may be expected."
Maxwell operates and maintains a 50 percent working interest before payout (54.1 percent after payout) in the 12-5 well and controls over 10 sections of land in the immediate area, the majority of which is at a 75 percent Maxwell working interest.
INTERNATIONAL
NAFTEX Energy Corp. announce that oil production commenced from the Rabeh-1 Well in the West Esh El Mallaha (WEEM) Development Lease, on February 2, 1998. The well is currently flowing on 1/2'' choke with an average rate of production of 2,000 BOPD. Production levels may be increased after monitoring the well's performance.
Trucking of the oil has commenced to the nearby Gebel Zeit terminal on the Gulf of Suez coast using Geisum Oil Company facilities. The Company is of the opinion that the Early Production Facility installed and operated by Alpine Oil Services-Egypt (a subsidiary of a Calgary based company) is the most technically advanced and cost effective facility in the area.
The Joint Operating Company is currently negotiating with different drilling contractors for the lease of a rig to start the scheduled four-well drilling program. The planned WEEM 3D and 2D seismic programs are expected to commence by mid-April this year.
Valiant Enterprises Ltd. is finalizing negotiations for the purchase of Valiant Resources Ltd., a related privately owned company for an undisclosed amount and will subsequently seek regulatory approval for the transaction. Valiant Resources Ltd. is a Calgary based petroleum exploration company that has recently acquired a 110,000 acre exploration license in Israel. Engineering reports indicate recoverable oil reserves of 43.5 million barrels.
SERVICE SECTOR
Enertec Resource Services Inc. and Advantage Energy Services Ltd.announced that Enertec has acquired Advantage's interest in the Enprotec Joint Venture.
Enprotec will continue to provide services and risk capital for production enhancements on existing fields in return for a portion of the enhanced value on a gain sharing basis.
Enertec operates throughout North America providing land seismic data acquisition and processing services and marine geophysical surveying and positioning services. Advantage Energy Services Ltd. will continue to provide value creating production optimization and operational enhancement services to the energy industry both domestically and internationally.
PIPELINES
NOVA Pipeline Ventures Limited Partnership (NOVA Ventures) announced today it has concluded commercial arrangements to construct a $40-million natural gas pipeline to serve industrial customers in the Fort McMurray region. NOVA Pipeline Ventures Ltd., a wholly-owned subsidiary of NOVA Gas Transmission Ltd. (NGT), is the general partner of NOVA Ventures.
The new 108-kilometre pipeline will start at NGT's Buffalo Lake compressor station on the Leige lateral, located in northeastern Alberta. The pipeline will be constructed at between 20 and 30 inches in diameter, depending on demand. Initial capacity of the pipeline is expected to be 250 million cubic feet of natural gas per day.
''This new pipeline will serve customer demand for transportation of incremental natural gas to fuel the region's growing oil sands activity,'' said Eric Shelton, president of NOVA Pipeline Ventures Ltd.
NOVA Ventures has an agreement in place with Suncor Energy Inc. and is expecting to conclude an agreement with Novagas Canada Ltd. (NCL) shortly, to cover the transportation of natural gas to Suncor's oil sands upgrading facility near Fort McMurray. The incremental gas will serve Suncor's current and future needs, and will replace fuel removed as part of a new liquids extraction project being developed at Fort McMurray by NCL.
''This arrangement provides us with a secure supply of natural gas as our oil sands operation gears up for expansion,'' said Mike Ashar, Suncor's executive vice president.
NOVA Ventures is meeting with other potential customers to discuss the viability of expanding the line to provide additional capacity. Construction of the new pipeline will begin in the fourth quarter of 1998, pending regulatory approval, with completion scheduled for the end of the first quarter of 1999.
The new NOVA Ventures pipeline will recover costs through a customized price structure with customers. NOVA Ventures is conducting business in pipeline infrastructure and transportation services. The company will pursue growth opportunities complementary to -- but outside of -- NGT's traditionally regulated business.
REPORTS
EARNINGS
Geophysical Micro Computer Applications International
Message 3356551
RESERVES
PrimeWest Energy Trust
Message 3354555
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