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Gold/Mining/Energy : KERM'S KORNER -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (14268)	12/14/1998 3:00:00 PM
From: Kerm Yerman	Read Replies (3) \| Respond to of 15196

FIELD ACTIVITIES / Canadian 88 Energy Corp. and Redwood Energy, Ltd. to Drill Large Thrust Sheet Play in Wyoming CALGARY, ALBERTA--Redwood Energy, Ltd. (VSE:RWD) and Canadian 88 Energy (USA), Inc. a wholly owned subsidiary of Canadian 88 Energy Corp. (AMEX:EEE/TSE:EEE/ASE:EEE) have entered into an agreement to directionally drill a 14,000 foot Mississippian test on the Windy Point Federal Unit in the Foothills Overthrust Belt of Wyoming's Green River Basin. "We are very excited to join forces with a partner the calibre of Canadian 88 on this world class exploration prospect. This is a major milestone for Redwood Energy," according to Peter Ffoulkes-Jones, President of Redwood Energy, Ltd. "Our target reserve potential from the Mississippian Mission Canyon is estimated to be in the 200 to 500 billion cubic feet (BCF) range, which would be a substantial achievement for Redwood Energy, Ltd. The prospect is analogous to a recent large foothills discovery by Canadian 88 in Canada in the Waterton area of southwest Alberta," added Jim Catlin, Vice President - Exploration. The Windy Point Federal Exploration Unit comprises some 7,029 gross acres in the Foothills Overthrust Belt in Lincoln County, Wyoming. The acreage is located approximately 35 miles north of Evanston, Wyoming in a prolific oil and gas producing area. The giant Whitney Canyon/Carter Creek Field, located approximately four miles southeast of the Windy Point Federal Unit boundaries, has estimated natural gas reserves of 5.3 trillion cubic feet (TCF) and 115 million barrels of liquids. The well will be directionally drilled re-entering an existing well (100 percent by Canadian 88) from a surface location in the NESW of Section 10, T19N-R120W. Redwood Energy will be carried for 10.15635 percent of the drilling, completion and equipping of the test well. Future development will be shared 87.5 percent by Canadian 88, 10.15635 percent by Redwood and 2.34365 percent by Legacy Energy Corporation, a private Denver company. A drilling rig has been contracted and is expected on site within 30 days. It is anticipated that it will take 60 days to reach total depth. The well is estimated to cost $US 2.5 to 3.0 million. Redwood Energy, Ltd. is a junior oil and gas exploration company with interests in Alberta, Canada and Oklahoma and Wyoming in the United States. Canadian 88 Energy Corp. is an independent public oil and gas company with head offices in Calgary, Alberta, Canada.

To: Kerm Yerman who wrote (14268)	12/14/1998 3:42:00 PM
From: Kerm Yerman	Read Replies (6) \| Respond to of 15196

IN THE NEWS / Industry Holding Its Breath Over Blowout - Lost Hills The Bakersfield Californian December 14, 1998 Bad news has been incredibly pervasive in Kern County's oil patch for the past year. Oil prices are down an average of 40 percent, cutting off the cash flow to both small and large oil companies operating here. Occidental Petroleum's oil and gas division announced a 65 percent reduction of its headquarters staff in Bakersfield. Arco traded its local operations to Mobil, leaving the fate of nearly 200 workers up in the air; most will likely lose their jobs. Drilling companies and well service firms have trimmed their payrolls. Small oil producers have laid off workers and asked those staying to take pay cuts. Those are some of the reasons the blowout of a wildcat well near Lost Hills last month is so exciting. In and of themselves, blowouts are bad. But in this case there's enough good news to balance that out of the equation. The companies drilling the Lost Hills well believe there's a major reserve of light oil and natural gas more than 17,000 feet underground. Whether or not that is the case remains to be seen. But it's obvious there is at least some concentration of hydrocarbons; the well burned fiercely for more than two weeks before underground water eventually won out and the flame died Tuesday. The operators of the well will drill anew, in a two-pronged effort to stop the flow from the blown-out well and again test the potential of the 17,000 foot-deep reservoir. Therein lies the excitement. If the Lost Hills wildcatters prove they have a big find on their hands, a whole new round of deep exploration could begin. As many companies who have invested in the well are quick to point out, Kern County sits in one of the most lucrative oil-producing areas in the United States. Within the county are four fields that have produced more than a billion barrels of oil and dozens of lesser — but still major — oil fields. Nowhere else in the nation is so much oil concentrated in such a small area. It comes as no surprise that there may be more oil here. All the geologic elements are in place. Interestingly, the major oil companies have essentially abandoned efforts to find new fields here. Their focus is on exploiting the known fields to the fullest, driving down costs and being profitable. That leaves the opportunities for wildcatters to exploit. Mainly high-risk entrepreneurs, the people behind the Lost Hills play, looked at their seismic data, gazed a mile away at the (currently producing) Lost Hills field and did a collective gut check. Then they ponied up the estimated $5 million for the well. After six months of drilling, the top blew off their dream. Although they frowned at the blazing well, when they turned away, they were smiling. They had gambled, and it looks like they may have won. It will take months — even years — before additional wells prove or disprove their dreams. But you'd better believe that everyone with a pile of deep oil leases and seismic data is brushing the dust off their stashes. Land agents are scurrying to nail down deals. Geologists are getting calls and executives are doing risk analyses. The good news for Kern is that more attention to deep prospects could eventually pay off in more finds and a whole new series of oil fields for local mapmakers to plot. It could extend the life of an industry that is at the core of the county's economic health. Jobs would be created, the coffers of county and local governments could swell; money would be made. After a year of dismal events, the Lost Hills wildcat is welcome news. For the next several months, the collective breath of local industry watchers will be held. If the new well comes in big, be prepared to grab hold and go along for the ride. Canadian joint venture participants in the Lost Hills play include Elk Resources, (operator), Stanford Oil & Gas Westminster Resources, Richland Petroleum, Hilton Petroleum, Kookaburra Resources, Paramount Resources and Berkley Petroleum. Continuing Bakersfield Californian news file can be found at bakersfield.com