PetroGlobe Inc. (PetroGlobe), a company engaged in exploring, developing and producing oil and natural gas, has made a new oil pool discovery in southern Alberta. The light oil well, located in the Grand Forks/Taber area of southern Alberta was drilled under a farmin agreement and targeted the upper Sawtooth formation. The well was perforated and completed in the upper Sawtooth and flowed a stabilized 46 barrels of oil per day (bbls) of 32 API gravity oil per day and had a 20% water cut.
PetroGlobe plans to commence production immediately and the production results will be evaluated in combination with the corporation’s recent 3D seismic data to determine next stage delineation drilling. Based on surface access restrictions, the corporation expects to commence its delineation drilling program at Grand Forks/Taber in the fourth quarter of 2009.
As a result of drilling this test well, PetroGlobe has earned a 100% working interest in 640 acres subject to a non-convertible override. The corporation has an option until September 1, 2010 to earn an additional 800 acres under similar terms. PetroGlobe secured the prospective acreage around the discovery well through the purchase of 960 gross (864 net) acres over the last several months in the Grand Forks/Taber area.
In addition to the upper Sawtooth, the 3D seismic shot by the corporation reveals several Mannville prospects on its land.
Two natural gas wells were drilled in the Pembina area of west central Alberta and are the final commitment wells in a multi-well farm-in commitment with a landholder in the area. As a result of the drilling the wells PetroGlobe earned an additional 1,280 gross acres of shallow gas rights. The company’s total gross earned acreage in Pembina is 30,000 acres (net 18,000). The corporation expects to tie-in these wells along with four wells currently behind pipe in the third and fourth quarters 2009 depending on natural prices.
All wells drilled will qualify for the Alberta government drilling credit of $200 per meter that can be used to offset existing crown royalties. Total drilling credits available as a result of this drilling program total $550,000.
Additionally all new production from these wells and existing behind pipe production qualify for the Alberta government incentive program resulting in 5% royalty on the first year of production to a max of 50,000 bbls of oil or 500,000 million cubic feet of natural gas.