FIELD ACTIVITIES / Encal Energy announces Exploration Program
CALGARY, May 06 /CNW/ - Encal Energy Ltd. (TSE: ENL, NYSE: ECA) announces
that it is commencing an exploration program in eastern Canada. The Company
reports that it has signed an agreement to join Shell Canada Limited in its
farm-in to Corridor Resources Inc. on Anticosti Island, Quebec.
Encal has committed to pay 50 percent of the costs of a three-year
exploratory program on the island, subject to a maximum net earning
expenditure of $10.0 million. Upon completing its farm-in obligations, Encal
will earn an undivided 50 percent working interest in approximately 2.4
million gross exploratory acres before project payout, and an undivided 30%
working interest in these lands after five million barrels of oil equivalent
have been produced, removed and sold from the island. The program calls for
the drilling of four exploratory wells - two in 1998, and one each in 1999 and
2000, plus the acquisition of a minimum of 500 kilometers of new seismic data.
The first well is expected to spud in the second quarter of 1998.
Encal's capital requirement for the Anticosti Island project during 1998
is estimated to total $6.5 million which will be funded out of the $30 million
opportunity capital pool. The Company's total capital budget for this year is
$160 million, of which at least $130 million has been allocated to exploration
and development projects in its core operating districts in western Canada.
In commenting on this program, Encal President David D. Johnson said
''This opportunity exposes Encal to large reserve prospects, which if
successful, would provide a substantial increase to the Company's asset base.
It adds a new dimension to the Company's ongoing strategy of aggressive growth
through the drill bit.''
Encal Energy Ltd. is a Calgary-based, intermediate exploration and
development Company, with an emphasis on successfully finding and efficiently
producing light oil and natural gas reserves. The Company currently produces
approximately 26,000 barrels equivalent per day.
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