Well Results
Strategic participated in two horizontal oil wells which were drilled and multi stage fracture stimulated (a-C18-J-D94-O-11 and a-49-J-D94-O-11) and worked over three of the existing vertical wells in the area. The drilling and workover program has earned Strategic a 25.0 percent (after payout) working interest in approximately 13 sections of land.
Both wells drilled penetrated the Chinkeh sand at a depth of 1,600 metres and were drilled horizontally for approximately 1,350 metres. The drilling program was successful in keeping the drill bit within the Chinkeh formation for the entire length of the horizontal program. The horizontal section was then successfully completed using 11 separate oil fracture stimulation stages. The results from these two wells helped confirm the presence of the Chinkeh formation, which Strategic believes is an aerially extensive blanket sand.
Both wells were production tested and placed on production with pump-jacks and tied in to a natural gas gathering and processing facility. As a result, combined deliverability from these wells is currently restricted by the owner of the natural gas facility. The operator has advised us that all the frac oil has now been recovered and the well is flowing formation oil. Based on field performance and internal engineering evaluations, Strategic estimates that Maxhamish wells have a productive capacity in the range of 200 to 250 barrels per day with a targeted recovery of 200,000 to 250,000 barrels of proved plus probable reserves of 40 degrees API oil under primary production.
The Chinkeh is thin so the horizontal wells can be easily watered-out if the bit strays outside the formation. The location and the limited transport capacity is a problem.
The well productivity looks positive, but only time will tell at which point does the production stabilize.
"Land acquisition
Based on the positive results from the two wells, the Company, along with its partner, bid and was successful at two recent Crown land sales in the Maxhamish area. The two land sales added approximately 19 sections of highly prospective lands for the Chinkeh sand immediately to the west of the lands included in the Farmout Agreement, of which Strategic has a 38.5% interest."
"Future Development
The Company is in the early stages of assessing the contingent resources. The initial results add confidence to the Company's initial internal estimates of over 500 million barrels of Total Petroleum Initially in Place (PIIP) on the 100 sections of land available to Strategic. Results of these wells are currently being assessed with the operator and future development plans for the next year will be determined accordingly. A range of development plans are currently being considered."
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