Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (41375)	4/4/2005 8:26:50 PM
From: Bearcatbob	Respond to of 206148

Dear Northern Spotted Cat Friend from Your Southern Bearcat Friend - Read This: International Frontier Resources Corporation April 4, 2005 Dear Shareholders, This report covers operations for the first quarter 2005. Flintstone Project – Central Mackenzie Valley, NWT The Company had a very successful drilling and testing campaign this winter; a summary is as follows: Summit Creek B-44 Wilma Structure The original completion program called for extended production testing of up to six intervals within the Devonian reservoir. Due to the operational problems encountered early in the program only four intervals were production tested, results are: Interval One The lowest interval was perforated and acidized; hydrocarbons were not encountered. Interval Two Interval two was perforated, acidized and flow tested for 18 hours. Gas rates of approximately 10 million cubic feet per day and 3,000 barrels of 56 degree API condensate were produced against a one inch choke with a flowing well head pressure of 900 psi. A third party flow and pressure buildup report indicates an absolute open flow (calculated AOF) of 30 million cubic feet per day with an average down hole reservoir pressures of 3448 psi. Intervals Three & Four Interval three and four were perforated and acidized. A 39 hour commingled production test was completed. Gas rates of approximately 10 million cubic feet per day and approximately 3,000 barrels of condensate per day (56 API) were produced against a one inch choke with a flowing well head pressure of 1100 psi. The AOF has yet to be calculated on intervals three and four at the time of this letter to shareholders. Intervals five and six were not tested and remain behind pipe. Sah Cho L-71 Betty Structure IFR participated for a 5% interest in drilling the Sah Cho L-71 exploratory wildcat well. The well tested a separate structure located five miles southeast of Summit Creek B-44. The well was drilled to a total depth of 12,050 feet, logged, drill stem tested and a casing liner (6.5 inch) was hung from intermediate casing depth to a total depth of 12,050 feet. The L-71 well has been suspended in a fashion that will allow the well bore to be re-entered. Summary I thought it worthwhile to provide a summary on what we do and what we do not know yet. What we do know 1. The consortium has discovered a new petroleum province south of Norman Wells, the first to be discovered since 1940. The petroleum system contains liquids rich gas, based on test data the hydrocarbon stream is approximately 300 barrels of 56 degree API condensate per million cubic feet of gas. 2. The Summit Creek B-44 well can produce high rates of gas and condensate, combined flow rates were 20 MMCF/D and 6,000 BCPD. 3. Operation problems were encountered in the B-44 well; they are now history and need not be dwelled upon. What was learned is to run larger production casing in future wells. 4. The drilling program used on the Sah Cho L-71 was far superior to previous drilling programs; the well was drilled to total depth without any problems and in record time. The well has not been abandoned and the evaluation of data is ongoing. 5. The L-71 well tested the Betty structure located five miles southeast of the Wilma structure. The Wilma and Betty structures are separate structures. 6. Hydrocarbons were encountered in the L-71 well. Eight drill stem tests were conducted, one of which flowed formation water from a zone that does not appear to be present in the B-44 well. 7. The consortium holds approximately 1 million gross acres on which additional structures have been identified on 2D seismic. 8. Exploring on the Flintstone Project will not be cheap. Until an all weather access road is constructed temporary access roads are required at an approximate annual cost of $6 million. Depending on well depth, drilling costs will range between $6 and $15 million per well. 9. 3D seismic will assist in drilling appraisal and development wells. 10. The size of the prize in the Flintstone project area could be significant. Our internal estimate of the Company’s existing acreage inventory at this early stage of this exploration play suggest the total resource could be between 500 billion cubic feet (500 BCF) and one trillion cubic feet (1 TCF) and between 100 million (100 MMBO) and 200 million (200 MMBO) barrels of light oil or condensate. Exploratory and appraisal drilling will provide the key to unlocking the area’s potential. What we do not know yet 1. What are the reserves of the Wilma structure; 3D seismic and appraisal drilling will provide the answer. 2. How many wells are required to effectively drain each structure. 3. Intervals five and six in the Wilma B-44 well have not been tested. What they contribute to reserve estimates and production rates will not be known until a production test is completed. 4. Is the reason why commercial rates of hydrocarbons did not flow on DST in the Sah Cho L-71 well due to formation damage caused by drilling mud invasion. Will Betty L-71 flow hydrocarbons after being perforated and acidized. 5. Will individual structures contain gas and condensate or will some structures contain just gas or just condensate - oil or will some structures be water wet. 6. The structural style and how each structure was formed and the plumbing of each structure. 7. Do the shallow Cretaceous and deeper Mount Kindle reservoirs contain hydrocarbons. 8. Will 3D seismic lower drilling risks and can seismic, drilling and completion costs be reduced. 9. The cost to re-inject gas back into the formation and deliver oil/condensate to the Enbridge oil pipeline that services Norman Wells. 10. What is the plan for this summer’s seismic program and next winter’s drilling program. This will be finalized after all data received from this winter’s program is analyzed. There are many unanswered questions that only new seismic and the drill bit can answer. Southern Northwest Territories In February 2005 the Company signed of a Memorandum of Understanding (“MOU”) with the Katlodeeche First Nations (“KFN”). The agreement sets out a frame work that provides IFR with the right to A) enter into a lease and grant with KFN on all or a portion of the Hay River Reserve Lands covering approximately 52 square miles and B) provides IFR with an exclusive right to access KFN Traditional Lands covering an area of approximately 1.9 million acres. The MOU can be summarized into three key points: 1. IFR will conduct a technical evaluation of the KFN lands by acquiring trade seismic data, shooting new seismic data and conducting field geotechnical studies, where required. 2. IFR will advise KFN on areas that are prospective for oil and gas accumulations and KFN will request the Federal Government open the lands for a Rights Issuance. 3. IFR will fund 100% of the cost to explore on KFN lands to earn 95% of any revenue generated. Upon IFR recovering 135% of its investment KFN and IFR will be 50 – 50 partners. The area, which is located adjacent to Alberta’s northern border, has been under a moratorium on exploration for approximately 20 years, therefore no modern seismic or well data is available. There is new well data in the Cameron Hills area that will become available after land claims are settled. The Cameron Hills oil and gas pools are covered by Production Licenses issued by the Federal Government to Paramount Resources in the 1970’s. In 2005 an exploration program will commence on the KFN lands. The goal is to have drill ready locations identified in two to three years. The cost to explore in this region will be significantly less than the Central Mackenzie. The area is serviced by a paved highway therefore seismic and drilling costs will be more in line with costs to explore in Northern Alberta and British Columbia. SIDOX Pilot Project Phase two of the SIDOX pilot project on the Alderson (100%) oil pool commenced on April 1, 2005. A second treatment of SIDOX was applied in wells 11-27, 9-27 and 5-26. A review of phase one production results confirmed Sidox did alter permeability in the Alderson reservoir. The field produced more emulsion resulting in increased oil rates of 35%. We are still in the R&D phase; in phase one we learned wells treated down tubing react much better to the Sidox than wells treated down casing. Field application costs per well have been reduced from $25,000 to $11,000, net of load oil recovery. In phase two we are experimenting with Sidox volumes and shut in time periods. On a go forward basis we would like to treat new wells with varying reservoir rock characteristics and oil production rates. If the application of Sidox can increase a wells production rate from 25 BOPD to 50 BOPD industry will be keen to joint venture with the Company. In 2005 the Company plans to acquire new wells for Sidox testing however given current oil prices oil properties are commanding top dollar and are not easy to purchase. Financial At March 31, 2005 the Company had 34.5 million common shares outstanding, 43.5 million fully diluted. In Q-1, 2005 890,700 series “B” warrants were exercised at a price of $1.50 and 204,857 series “C” warrants were exercised at $1.75 per share. At March 31, 2005 there are 5,173,300 (2,586,650 shares) series “B” and 1,769,732 (884,866 shares) series “C” warrants unexercised. At March 31, 2005 the Company had a positive cash position of $10.5 million and no debt. I sincerely wish I could explain why the stock market has penalized the Company’s share price for making a significant discovery in Canada’s northern frontier. We are confident that values appropriate to the Company’s real results will ultimately be reflected in the public market place. In the meantime we wish to express our gratitude to all shareholders who have and continue to support International Frontier through this exciting and somewhat trying period. Yours truly, Pat Boswell