Drilling to commence at Harmon Valley

Drilling to commence at Harmon Valley

Source Petroleum, Inc. has been notified by the operator and joint venture partner, that the first well of a multi-well program in Harmon Valley, in the Peace River Oil Sands district, will commence drilling in the upcoming days to appraise the reservoir characteristic and to delineate the reservoir. Nabors Drilling has been contracted to drill the HZ Peace River 1-29-83-19 W5M well which is anticipated to commence imminently.

The first well of the proposed program, HZ Peace River 1-29-83-19 W5M, will be targeting the Bluesky – Gething formation. Core information and a horizontal leg will assist in developing a plan for a possible primary and secondary oil recovery scheme. The remaining wells of the program are expected to be drilled in late 2007 to allow for interpretation of the drilling results from this well. The Bluesky – Gething formation is believed to contain an estimated 9 billion barrels of oil in place in the Peace River Oil Sands District. The well will be drilled to a total vertical depth of 680 meters, and a horizontal leg of 745 meters.

Historical wells and well log data show that there could be up to 200 – 250 million barrels of original oil in place (OOIP) at the Harmon Valley asset. Historical wells and well log data have also displayed excellent core porosities and log porosities of 29% and 31% respectively with estimated permeability of up to 5,000 milliDarcies.

The Harmon Valley asset is situated 12 KM S.W. from Baytex Energy’s heavy oil project, 20 KM S.S.W. of Shell Canada’s Cadotte heavy oil project and 25 KM S.W. of BlackRock’s Ventures heavy oil Project which was recently sold to Shell Canada.

Source has entered a farm-in agreement to earn 50% of the Harmon Valley heavy oil opportunity which has an estimated 200 – 250 million barrels of original oil in place (OOIP). Under the agreement Source can earn a 50% working interest by drilling 100% of a six well commitment. The program to be undertaken includes drilling one horizontal appraisal well with up to an additional five horizontal wells if required.

Source: www.oilonline.com

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