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Gold/Mining/Energy : KOB.TO - East Lost Hills & GSJB joint venture -- Ignore unavailable to you. Want to Upgrade?

To: Salt'n'Peppa who wrote (2374)	5/6/1999 2:05:00 AM
From: grayhairs	Read Replies (2) \| Respond to of 15703

Hi Rick, The excerpt below is extracted from WML's PR yesterday which can be found in its entirety at: fin-info.com The boldface emphasis is mine. ------------------------------------------------- EAST LOST HILLS, CALIFORNIA Westminster participated in the drilling of the Bellevue #1-17 well (7.125 percent net interest) which spudded on May 14, 1998. This well was intended to test hydrocarbon potential in the Temblor formation at depths of approximately 16,000 - 18,000 feet. Westminster and partners had seismically mapped a 15 - mile anticlinal feature using close - spaced, 2- dimensional seismic data. The Temblor formation in the area consists of interbedded sands and shales where total formation thicknesses can be in excess of 2,000 feet. Of this thickness as much as 85 percent can be sands with porosities ranging from 6-16 percent and very high permeabilities. The potential sand thicknesses combined with the size of the anticlinal feature suggest very large reserve targets. The initial wellbore did not encounter the structural "top" of the seismic feature and the partners decided to whipstock the well to the northeast. The whipstock well was drilled into Temblor sands and on November 23, 1998, the well blew out at a depth of approximately 17,657 feet. Relief efforts began immediately and are continuing with a relief well which spudded on December 18, 1998. Surface facilities were installed on December 17, 1998 to allow produced water and hydrocarbons to be contained. Subsequently, a water disposal line has been connected to local water injection facilities thereby eliminating trucking. A gas pipeline has also been installed to conserve raw gas. The gas is now being delivered to a local oilfield. Additional drilling is planned for 1999 to provide a full penetration and evaluation of the Temblor formation, so that reservoir characteristics can be established. SAN JOAQUIN CALIFORNIA FOLDBELT PLAY The results to date from the drilling at East Lost Hills have prompted Westminster to expand its exploration efforts in the San Joaquin Basin. On April 8, 1999 the Company announced a new strategic focus for 1999. The Company has entered into a letter of intent with Berkley Petroleum Corp. to participate in three additional exploration prospects in the San Joaquin Basin of Southern California. Participation in the project will involve a minimum of three wells during 1999 and 2000. Westminster has a 9 percent participating interest in the new prospects. The prospects have similar seismic characteristics and reserve potentials to that of East Lost Hills. Berkley Petroleum Corp. will operate the drilling of the new prospects with the first well scheduled to commence in June 1999. 1999 FOCUS Westminster announced its intention to rationalize its existing producing natural gas assets to accommodate the Company's expanded interests in the four San Joaquin prospects. This rationalization, cash flow generated from high natural gas netbacks, and other initiatives, will allow the company to fund the California prospects. The Company has signed a letter of intent for the sale of certain producing gas assets in northeast British Columbia to an industry partner for $14 million. The sale is expected to close in late May 1999. Proceeds from the disposition will be used to enhance the Company's working capital position and to fund the initial new drilling activities in the San Joaquin Basin. --------------------------------------------------------------- Kinda looks as though WML is of the opinion that they have hit it big at ELH. IMHO, it is most unusual for an established company to sell off assets of this magnitude to finance "exploration". But then perhaps (with the data available to them) WML do not consider ELH to be "exploration". Do you suppose that the initial 100+ MMCF/d flow from just 1 per cent of the expected sand pay (just 17 feet of Temblor penetration at the time of the blow out versus an expected 85% of 2,000 feet of total pay !!!) and the sustained blow\pressures has had any influence upon their decision to rationalize ?? They must be pretty damn confident with what they have at ELH to risk so much "egg on their faces" !!! Greed causes me to hope that they are right !! <<ggg>> Later, grayhairs