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Gold/Mining/Energy : Montello Resources -- Ignore unavailable to you. Want to Upgrade?

To: griz who wrote (3856)	12/15/1999 3:55:00 PM
From: JP	Read Replies (1) \| Respond to of 4256

A bit of background on the oil play... The Leduc and Swan Hills are geological names for two separate ancient reef regimes in the Devonian system in Alberta. During Devonian time, some 400 million plus years ago, expansive seas predominantly covered Alberta and created the setting for enormous reefs to grow. Geologically speaking, the Leduc is only slightly younger than the Swan Hills. Initial reef growth in both zones was incepted by similar criteria as the organisms that comprise these reefs looked for positive structural highs on the broad based sea floor to begin their life and establish a colony. By definition, reefs are independent colonies comprised of multiple species living in harmony in a thriving community. Provided that adequate light and warmth (sea water depths of thirty feet (30') or less sufficient to supply nutrients) are sustained, reefal habitats continue to grow and flourish (i.e. The Great Barrier Reef off the coast of Australia - modern example). As with present day reefs, ancient reefs often reached gigantic proportions. Ancient reefs are commonly buried beneath large overburdens of sediment. In Alberta, the ancient Leduc and Swan Hills grew to outstanding heights and lengths. Both formations are at significant depth for exploration. Size and burial depths yielding very high pressures in reservoir rock combine to generate phenomenal Leduc and Swan Hills oil and gas reserves with a prolific recovery factor. The Leduc and Swan Hills "house" some of the most productive reservoirs in Alberta. The Leduc discovery in 1947 near Leduc, Alberta, launched an unprecedented era in the search for vast oil accumulations in Alberta in this geological zone. In the Sturgeon Lake Area, Northwestern Alberta, one such independent massive oil reservoir reef complex was discovered. Associated with this complex are features called pinnacles which by their nature are the "gems" of the reef environment. Pinnacles are isolated from the complex, usually within a few miles of and proximal to the complex edge. Having grown on the original substrate or platform of the main reef complex, provided that sea level fluctuations are not dramatic, pinnacles can attain astounding heights, sometimes in excess of the main complex, and frequently trap 1 to 10 million barrels of recoverable oil reserves from an aerial distribution of 1/4 mile or less. Likened to "skyscrapers", pinnacles can often be readily identified on seismic as large 100 to 300 foot reefal buildups. Several individual Leduc pinnacles have been discovered to the East of the Main Sturgeon Leduc Complex. Montello lands also lie to the East on the same pinnacle growing platform as the discoveries. Lying on a hinge plane, an ideal geological setting for pinnacle development, the Montello lands are on a comparable hinge plane to a producing pinnacle approximately 2 miles away with an original estimated 5 million barrels of recoverable oil reserves. A very large identified Leduc pinnacle feature has been isolated on Montello lands. The drill target will attempt to strike the crest of the pinnacle and possibly drain the entire recoverable reserves with just one well. Considered the "Lottery ticket" of the oil industry, one pinnacle success can bring instant recognition as an established company-maker with Leduc oil production at 500 to 1,000 Barrels Oil Per Day. In today's market, a 5 million barrel success translates to approximately a net $100,000,000 Cdn return at 100% interest (possible from just one well). Swan Hills reef exploration is equally as exciting. In the Sturgeon Lake Area, a long sinuous ribbon-like barrier reef has already been identified through a discovery well approximately 2/3 of a mile from the Montello lands. In geological terms, this is extremely close. This discovery well contains about 600,000 barrels of recoverable oil reserves. Geological and geophysical data illustrate a typical reef profile of reef rim, lagoon and back reef and suggest that the targeted reef rim on Montello lands grew higher and most likely has greater reserves than the discovery well. Average daily production from the Swan Hills of 250 to 500 Barrels Oil is very possible. Recoverable reserves in excess of 1 million barrels of oil per well are anticipated. In today's market, a 1 million barrel success translates to approximately a net $20,000,000 Cdn return at 100% interest (per well). More than one drilling location has been established on Montello lands to test the Swan Hills. Coincidentally, the first drilling target on Montello lands is expected to test both the Leduc and Swan Hills. For greater clarification, the mapped Leduc pinnacle appears to be present immediately above the Swan Hills barrier reef rim.