The drill cutting samples recovered from the Lower Shaunavon zone had oil staining and the open hole logs indicate potential oil pay as per the company’s interpretation.

The company drilled the well to extend the mineral lease and prove up the Lower Shaunavon in section 19-7-18 W3. The Lower Shaunavon horizontal oil well, 91/2-24-7-19W3, which started production in January 2010, had a reported production rate of 179bopd for April 2010 with cumulative production of 13,550 BO.

Diaz, which has an interest in seven sections of land in this area, plans to complete the 91/13-19-7-18W3 well and monitor the offset production before finalizing its development plan for the area.

Diaz is the operator of this exploration work and has a 45 % working interest (WI), while the other partners in the well are Sharon Energy (20 % WI) and Tuscany Energy (35 % WI).