Calgary-based Promax Energy Inc. said Thursday that it has drilled a “significant” new Manville channel discovery well in southern Alberta. Drilled late in 2002, the Promax-owned natural gas well tested at an absolute open flow rate of 17.7 MMcf/d following a single point flow and build up test.

Initial flow tests indicate a starting flow rate of 1.6 MMcf/d at 1,154 psi flowing bottom hole pressure and a 1,252 psi shut in bottom hole pressure. The company said the well is expected to be tied in and producing into Promax’s wholly owned facilities by month end. Soon after the company made the announcement Thursday, Promax’s shares jumped 33%, or C$0.08 to trade at C$0.32 in early afternoon trading on the Toronto Stock Exchange.

Based on this channel discovery and an offset well, the junior oil and natural gas company said it has identified up to 10 similar features under its existing land base using its seismic data. Promax added that 60 miles of 2-D seismic and four square miles of 3-D seismic are planned for January and February to more fully identify the play.

In 2002, the company drilled 24 gross (21.3 net) wells, eight to the Mississippian and 16 to the Medicine Hat. Six of the eight Mississippian wells have resulted in Manville discoveries and all 24 are capable of production from the Medicine Hat or shallower zones. Promax said drilling programs in 2000 and 2001 focused on earning land, while the 2002 program began the process of developing Manville leads with discrete seismic programs and continuing the development of the long-life, low productivity blanket deposits of Medicine Hat/Milk River and coal bed methane.

Subject to suitable financing, stabilization of natural gas pricing and definition of the impact of the Kyoto Protocol, the company said it will drill up to 60 Mississippian wells and 180 Medicine Hat wells in 2003. Complete with land acquisitions, seismic and facilities, the 2003 capital program is anticipated to be C$50 million with the bulk of the work beginning in 2Q2003.

In December, Promax reported that it had experienced a 23% increase in total production over the 3Q2002 daily average. Production from the Medicine Hat/Milk River wells has increased 74.9% to a current average of 733 boe/d and is anticipated to exceed 900 boe/d. The company has a high working interest in over 250,000 acres in a gas-prone area of southeastern Alberta with multiple producing horizons including long life Medicine Hat/Milk River.

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