Industry Briefs

Calgary-based Canadian 88 Energy Corp. has successfully drilled a significant deep natural gas well in Western Alberta to a depth of 15,709 feet. The well is a stepout into the prolific Blackstone Devonian Swan Hills gas pool and log results indicate 98 feet of highly porous dolomite gas pay, averaging 10% porosity analogous to other wells in the pool. The well, located about 1.9 miles from other wells in the Blackstone pool, encountered the top of the gas pay 246 feet higher than any previous well. Canadian 88 expects to have more information when the well is completed and on production within six months. The Blackstone pool, which is 150 miles northwest of Calgary, was discovered in 1984 and has produced 404 Bcf of sales gas from three wells to date, with an estimated 355 Bcf of sales gas remaining. Two wells are currently on production in the pool, each producing at a rate of approximately 50 MMcf/d.

Canadian Hunter Exploration Ltd. has acquired a Canadian company and another in Argentina, confirming statements made recently that it was in the market for acquisitions (see NGI, Sept. 10). The Canadian assets, acquired from a private company for C$22.5 million, include property in the Chedderville and Garrington areas of West Central Alberta, adjacent to Canadian Hunter property. Neither acquisition is expected to materially impact Canadian Hunter's 2001 production forecast. According to Canadian Hunter, the Canadian assets' proven reserves include 14 Bcf, 31,000 bbl in natural gas liquids and 730,000 bbl of oil. They are currently producing 2.5 MMcf/d, 90 bbl/d in natural gas liquids and 410 bbl/d in oil. In total, Canadian Hunter's proven reserves will grow to 1 MMboe, and add 920 boe/d. In addition to the proven reserves and production, Canadian Hunter said that the property holds "significant" exploitation and exploration upside. Calgary-based Canadian Hunter closed on an agreement to buy the Canadian assets on Sept. 7. Along with increasing its interest in the Chedderville oil property, the acquisition will expand its production base in northeastern Alberta and will add about 52,000 net acres of undeveloped land with exploration and development opportunities. It includes tax pools of C$40 million, and Canadian Hunter said in a statement that "these assets meet the criteria for growing net asset value that we apply in approaching both acquisitions and exploration." Canadian Hunter also purchased the remaining Class A common shares of Atalaya Energy SA for US$13.5 million, effective Aug. 15. The shares were owned by Capex SA and Clan Energy International Fund, and will increase Canadian Hunter's working interest in the Chihuidos Exploration Permit and the Sierra Chata Exploitation Concession in the Province of Neuquen, Argentina by 2.2% to a total of 25.7%.

Bidder Communications Inc. (BIDC) said on Thursday that as part of its diversification strategy the company has acquired 100% ownership of Southern States Gas Gathering LLC of Louisiana. The acquisition gives BIDC entry into the southern energy resource market. Formed in 1994, the gathering system is located in northwest Louisiana within the Caddo Pine Island field, which has had over 10,000 wells drilled to develop oil and gas reserves. BIDC said the system has a replacement cost of $2.3 million. The system has been inactive since December 1999. Currently casing head gas is being vented into the atmosphere from wells throughout this field and it is estimated that the strategic positioning of the gathering system will allow the connection of 3,000 of these wells without the extension of the 65 miles of trunklines already in place. BIDC said that this enables the ultimate gathering of 5 MMcf/d of natural gas that on an individual producer basis is not economical, but collectively creates attractive revenue for the gathering system and the producers in the field. In conjunction with the acquisition, BIDC reported that Willard G. McAndrew III and Roger N. Wurtele have been appointed to the board of directors, and McAndrew will act as chairman until the next annual meeting of shareholders. In addition to the gathering company, GlobalSat data, an analytical process to select locations for drilling oil/gas wells, was included with the purchase.

The National Energy Board has scheduled a public hearing in November to discuss an application by Petro-Canada Oil & Gas to construct a natural gas pipeline from the Medicine Hat, AB area to Burstall, SK. Petro-Canada proposes to construct a 42-mile-long 10-inch pipe from its existing production properties in Medicine Hat to TransCanada Pipeline Ltd.'s system near Burstall. The pipeline would have a design capacity to transport 53 MMcf/d. The proposed pipe, estimated to cost C$9.9 million, would begin near the southeastern side of the Suffield Military Block in Alberta and extend northeast to Burstall, following existing corridors for most of its length. About eight miles would be new right-of-way, however. If approved, Petro-Canada estimates the in-service day would be May 2002. The hearing is scheduled for Nov. 19 at a location to be announced in the future. Written interventions have to be filed with NEB by Sept. 24. For a copy of Hearing Order GH-3-2001, contact the Publications Office Ground Floor, 444 Seventh Ave. SW, Calgary, AB T2P OX8, or call (403) 299-3562.

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