The company will retain 82.5% beneficial interest and will assume 100% of the drilling and completion costs inclusive of all operating, processing, transportation and production costs.
Pemberton is still in negotiations on the previously announced 840 acres of land in the Kindersley, Saskatchewan. The area is known for its oil rich Viking zone.
This area has proven to have high success rates through new horizontal drilling technologies with multistage fracturing techniques. Pemberton said this is a well delineated/low geological risk area and management will start planning for a drilling program for the property.
Development is expected to begin in the summer of 2010 and Pemberton has already received joint venture proposals on this prospect. The company continues further negotiations for additional lands in this area.
Reflecting on Scotia Capital Resource Spotlight Report, an estimated six billion bbls of oil is still in place in the Viking formation in this area. The report states that new horizontal drills in the area pay for themselves on an average of 1.3 to 1.6 years. Drilling and completion costs average $1.3m, and land sales in this region can average up to $3625.40/Ha. Spacing units in this area allow for up to 16 vertical oil wells per section.
