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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: teevee who wrote (8134)	4/4/2002 12:25:39 AM
From: Richard Saunders	Read Replies (1) \| Respond to of 24927

Cardium - somebody with a geo background help out. Recent RAX Rio Alto downward asset revisions indicated some mention re: Cardium. The following is taken from the RAX release: For 2001, material reserves adjustments were made to the Company's reserve base to account for a number of factors. These factors include; revised reservoir models for the tight gas Cardium holdings (50 percent of the revisions), adjustments to account for well performance profiles in selected northwest and northeast Alberta fields (30 percent), reclassification of some non-producing wells (10 percent), and recognition of recent water encroachment mainly in the Company's Gold Creek Wabamun pools (10 percent). In reviewing these reserves with the Company's independent reserves committee, GLJ indicated "The fractured Cardium and Wabamun formations are technically challenging reservoirs and it is difficult to predict long term reservoir performance early in the production life. Although GLJ did not evaluate reserves for Rio Alto in past years, it is understandable that given the nature of these reservoirs, there could be material differences between early evaluations and those conducted after significant production history has been accumulated." Using the new reservoir parameters, Rio Alto feels that the Cardium still contains significant economic potential for the Company. The economic fundamentals are further supported by an approximate 20% reduction in drilling costs the Company has realized over the course of the past year in the area, ensuring that a large portfolio of Cardium opportunities are attractive with finding and development costs of $1.75 or less per thousand cubic feet of natural gas equivalent. PEY Peyto has had a great run and it does look like an impressive capex program is planned for the days ahead based on expansion of bank line to $100mil. etc. I do notice that both of PEY's main areas -- Medicine Lodge and Sundance -- produce out of Cardium zones. (Cardium and Viking in Medicine Lodge. Belly River, Cardium, Notikewan, Viking and Triassic in Sundance). Someone with geo background please comment. Are individual wells site specific or do similar zones offer similar issues?