Hello Everyone, note that according to the more detailed document filed with the exchange land has already been acquired by the partners from Shell.Read below.
Jim P
Test results for the fourth well, Stampede Bcat et al TV 6-23-20-3 W5M, indicate a 40 foot net gas pay in the Crossfield zone. It is expected that this well will be production tested subsequent to the planned deepening results of the fifth well. The total depth of the fifth well, Stampede Bcat et al TV 7-25-20-3 W5M, in the Regional Mississippian Turner Valley formation is approximately 10,000 feet, which tested wet. This well is to be deepened to evaluate the Crossfield zone at a depth of approximately 12,000 feet.
Geological and seismic information derived from the first five wells drilled, together with newly acquired data indicate the presence of significant bypassed oil reserves in the Regional Mississippian Turner Valley formation. This reservoir underlies the currently producing Turner Valley formation reservoir in the shallower overthrust blocks where the main production in the Turner Valley oil field is derived from.
Imperial Oil Resources Limited ("Imperial") and Berkley Petroleum Corp. ("Berkley"), each with a 50% working interest, have entered into a farmin earning drilling arrangement related to the Corporation's petroleum and natural gas leases situate in a 17,920 acre block in the north end of the Turner Valley project. This block encompasses 5,220 acres of the Corporation's petroleum and natural gas leases. Imperial is the operator of the earning well, Imp Berkley Turner Valley 2-21-21-3 W5M. The Corporation will have a carried after payout working interest of 18.541% on oil and 11.125% on gas in the earning well and share a gross overriding royalty during the related farmor payout period.
Imperial, Berkley, the Corporation and partners have recently acquired a 640 acre petroleum and natural gas lease from Shell Canada Limited, located immediately south of and adjacent to the earning well location.
Berkley has also farmed into 22,376 acres of additional petroleum and natural gas leases held by the Corporation and its partners, whereby it has a 60% working interest in the related BPC et al Turner Valley 12-35-20-3 W5M earning well and is the operator. The Corporation has a 21.25% before payout working interest and a 12.75% working interest which is carried until the point of cost recovery. Accordingly, after cost recovery by Berkley in the earning well, the Corporation will have a 34% after payout net interest in the first well and similar pro rata interests in the balance of the related petroleum and natural gas leases.
Berkley also has an option to earn a 36% net interest in an earning follow-up well offsetting the first 4-13 Devonian gas discovery well. By participating in the drilling of this well, Berkley will also earn an interest in an additional 6,560 acres of the Corporation=s petroleum and natural gas leases in the immediate area of the first well. Seismic interpretation indicates that the related gas pool could contain up to 250 billion cubic feet of recoverable gas reserves.
The Corporation has interests ranging from 21.25% to 53.10% in a total of 35,606 acres of petroleum and natural gas leases in the entire Turner Valley prospect area.
The well operated by Imperial commenced drilling in November 1997 and was expected to reach total depth towards the end of January 1998. The well operated by Berkley commenced drilling in November 1997 and was also expected to reach total depth near the end of January 1998. The availability of Crown petroleum and natural gas acreage in this area necessitates that both of these wells be operated on a confidential "tight hole" basis.
The Corporation's ownership (net working interest), the Corporation's working interest share of costs and the total 100% costs to deepen the following wells are as follows:
Description of Well
Net Working Interest
Working Interest
100% of Costs
11-12-19-2 W5M (Stampede operated)
21.25%
21.25%
$1,948,900
7-25-20-3 W5M (Stampede operated)
25.5%
25.5%
$ 962,567
4-1-19-2 W5M (Stampede operated)
38.25%
21.25%
$3,208,556
One follow-up development well (Imperial operated)
18.54%
18.54%
$3,357,282
One follow-up development well (Berkley operated)
34.0%
34.0%
$3,000,000
Two additional follow-up development wells (Imperial operated)
18.54%
18.54%
$8,000,000
Three additional follow-up development wells (Berkley operated)
34.0%
34.0%
$8,823,529
The first three wells described above are expected to be drilled in the second and third quarters of 1998 and the follow-up wells described above are expected to be drilled during 1998. The locations of the expected follow-up development wells described under the heading "Use of Proceeds" are subject to future determination.
SUBSIDIARY CORPORATIONSSUBSIDIARY CORPORATIONS
The Corporation owns 34.384% of Highland Glen Explorations Limited and 40.88% of Panda Petroleums Ltd. The Corporation does not consider its holdings in either Highland Glen Explorations Limited or Panda Petroleums Ltd. to be material at this time.
DESCRIPTION OF SHARE CAPITALDESCRIPTION OF SHARE CAPITAL
The authorized capital of the Corporation consists of an unlimited number of Common Shares and 10,000,000 Class AA@ Preferred Shares in different Series, of which 55,255,637 Common Shares, 16,800 Class AA@ Series AA@ Preferred Shares, 15,900 Class AA@ Series AB@ Preferred Shares and 41,144 Class AA@ Series AD@ Preferred Shares were issued and outstanding as at February 19, 1998. After giving effect to the maximum offering, there will be 64,649,095 outstanding Common Shares and 73,844 outstanding Class AA@ Preferred Shares. The holders of Common Shares are entitled to one vote per share at all meetings of the holders of Common Shares of the Corporation. Common Shares do not have pre-emptive or conversion rights. All of the Common Shares presently outstanding were issued as fully paid and non-assessable shares and the Common Shares offered hereby will, when issued, be fully paid and non-assessable.
WARRANTSWARRANTS
Warrant IndenturesWarrant Indentures
The Series A Warrants and the Series B Warrants (the AWarrants@) will be issued under trust indentures (the AWarrant Indentures@) to be entered into between the Corporation and Montreal Trust Company of Canada, as trustee thereunder. No fractional Warrants will be issued nor will consideration be given in lieu thereof. Reference should be made to the Warrant Indentures for the full text of the attributes of the Warrants.
Term and Exercise PriceTerm and Exercise Price
Two Series A Warrants will entitle the holder thereof to purchase one Common Share at an exercise price of $2.50 per share at any time on or before 4:30 p.m. local time in the jurisdiction of residence of the holder on May 29, 1998, (two months) subject to adjustment in certain events. Five Series B Warrants will entitle the holder thereof to purchase one Common Share at an exercise price of $4.50 per share at any time after May 29, 1998 but on or before 4:30 p.m. local time in the jurisdiction of residence of the holder on July 31, 1998 (four months) subject to adjustment in certain events.
Application may be made to list and trade the Warrants on The Alberta Stock Exchange if the distribution of the Warrants meets the requirements of The Alberta Stock Exchange.
Series A Warrants will become exercisable upon issuance pursuant to the exercise of Rights and all Series A Warrants not previously exercised will expire at 4:30 p.m. local time in the jurisdiction of residence of the holder on May 29, 1998. Series B Warrants will become exercisable after May 29, 1998, but on or before 4:30 p.m. local time in the jurisdiction of residence of the holder on July 31, 1998, and all Series B Warrants not previously exercised will expire at 4:30 p.m. local time in the jurisdiction of residence of the holder on July 31, 1998. Under the Warrant Indentures, the Corporation may purchase in the market, by private contract or otherwise, all or any portion of the Warrants then exercisable and any Warrants so purchased will be cancelled. No fractional Common Shares will be issued upon the exercise of Warrants. |
