Forent Energy (Forent ) has entered into a joint venture agreement with Silverback Energy to partner in a multi-well oil exploration program. As per the terms of this agreement, the company will commit to drill and case two wells to earn an interest in almost 1,000 acres of oil prone lands in Central Alberta.
Forent has made its initial elections under these agreements and has started a multi-well drill program with the first three wells to be completed before year end.
The first well in this program was spud on November 28, 2009 in the Richdale area of south central Alberta. The well was drilled to a depth of 1,141mt where it encountered a Glauconitic channel with 3.5mt of net pay. The well is planned to be completed and tested by the end of December. The company has a 100% interest in this well before payout subject to a 10% gross royalty.
The next wells to be drilled as part of the 2009 program will kick off on December 17 with the spud of the first of two Ellerslie tests at a depth of 1000mt. The Ellerslie formation demonstrates extensive oil production in the area with offsetting production within 500mt of these locations. Upon success in establishing economic rates from these first two wells, there are a number of low risk step out locations identified on 3-D seismic that will be pursued in 2010, the company said.
In addition to the company’s drilling program, Forent is pursuing re-entry candidates that can bring on shut-in production from existing wells. The first such effort was kicked off in Caroline, Alberta where a shut-in well has been targeted for a work-over in an attempt to bring it back on production. The company has a 100% interest in this well.
The company was recently acquired a section of known oil lands in Central Saskatchewan. The company’s exploration group is reviewing the opportunities to re-enter and drill new wells on these lands to bring on production in early 2010.
The company has re-evaluated its farm-in with Black Sea Oil & Gas and has determined it is not in Forent’s interest to pursue this venture.
The company plans to complete the December drills and place them on test production by year-end, with a plan to install permanent production facilities early in the new year. The focus on increasing the company’s oil production permits the continued exploration and development of the 1.2 million acres of P&NG rights held in Nova Scotia.