AND EMERGING POTENTIAL LIGHT OIL RESOURCE PLAYS
"Legacy has established itself as a leader in light oil resource play development and has levered this expertise through its efforts over the past 10 months into two new potential light oil resource play opportunities. Capital spending activity to‐date on these two emerging new ventures has been funded as part of Legacy’s previously announced 2010 capital budget.
Through a number of transactions, the Company has assembled 31,292 gross (25,033 net) acres or nearly 49 gross sections of undeveloped land in Bottineau County, North Dakota. The lands are operated by Legacy (80 percent working interest) and are located southeast and on trend with the Waskada light oil field in southern Manitoba. Legacy expects these lands to be prospective for Spearfish (Amaranth) development opportunities, based on geological mapping, 2D seismic data and existing vertical well control, oil shows and production. Offsetting acreage in both Manitoba and North Dakota has seen Spearfish drilling success by other operators, with more than 130 multi‐frac horizontal wells drilled to‐date, at well densities up to 24 wells per section. The Spearfish reservoir produces 36o API light sweet crude from a depth of approximately 950 metres. The Company is in the process of permitting six wells in the area, with plans to initiate drilling in the third quarter of 2010."
EOG announced about two months ago that they had successfully expanded the Spearfish play to the United States. My understanding is that play is geologically similar to the Dodsland Viking.
"In addition, Legacy is the operator of a farmout agreement in the Maxhamish area in NE British Columbia that covers 50,000 contiguous acres of light oil resources play prospective land. The farmout agreement provides for the Company to earn, on a rolling option basis, a 61.5 percent before payout (40 percent after payout) working interest in the lands. The Maxhamish area is prospective for 40o API light sweet oil production from the Chinkeh Formation, found at a depth of approximately 1,600 metres. The Chinkeh reservoir appears to be an aerially extensive sheet sand that has produced minor quantities of oil from five vertical producers. To date, Legacy has successfully drilled and multi‐stage fracture stimulated two horizontal oil wells and worked over three of the existing vertical oil producers. Results of these wells are being assessed and future plans will be determined accordingly. The drilling and workover activity has earned Legacy a 41.7 percent (before payout) working interest in 8,450 gross acres of land."
I'd guess that Legacy's working interest in Maxhamish is much lower than they would like it to be.
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