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East Central
Rival continues to maintain a strong focus in east central Alberta. The area offers year-round access and lower drilling costs. The main attraction of this region is its multi-zone potential for high quality reserves and access to existing infrastructure. The area also allows Rival to cost effectively pursue a balance of oil and natural gas opportunities.
As of November 2005, we have completed six wells in this region for a 100 percent success rate. The most prolific have been the development wells associated with our Killam new pool oil discovery. Rival is benefiting from significant production gains of good quality oil from this pool and is processing all oil volumes through its owned and operated battery. The Company continues to actively pursue additional oil opportunities in this area along with a number of shallow natural gas prospects. As 2006 unfolds, the Company will begin to expand its scale of operations into two new exploration areas within the central (W5M) and the Peace River Arch (W6M) areas of Alberta.
Killam
During Q4 2004, Rival drilled a new pool oil discovery in the Killam area, making it now our most productive oil area at 400 bbls/d. The 10-25-41-15 W4M discovery well was drilled on a prospect developed in-house with the use of proprietary 3-D seismic, and is operated by Rival (84 percent). Since then, the Company has drilled four additional wells into this light oil pool and all wells are pipeline connected to the Rival operated battery adjacent to the property.
Success in this project and in Bellshill Lake has driven the Company to pursue additional exploration activity within the general region. Rival is pursuing a number of opportunities that could result in the Company significantly expanding its activities in this area. Provided we are successful in consummating a transaction, Rival’s exploration effort and capital spending commitment for this area will be significantly enhanced.
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Bellshill Lake
Rival operates this property that produces approximately 150 bbls net to Rival. All producing wells are horizontally drilled and typically yield high volumes of oil on flush production, before declining to approximately 75 bbls/d of oil over the initial six months. Rival has a 42 percent interest in the original oil pool and all the facilities and has an 80 percent interest in the adjacent land and the more recent discoveries in the area.
The Company recently identified an independent structure from 3-D seismic, and has recently completed two wells into this pool (80 percent net). Once the initial two wells have produced for a period of time, Rival will design a development program for 2006 that will generate additional drilling activity in the area. All production from this area is processed through a Rival owned and operated oil battery adjacent to this prospect.
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Central W5M
Loon
The Loon area is an exploration play with a higher risk profile that provides significant upside to any successful exploration efforts. Rival has a one-third working interest in the Loon area joint venture with Storm Exploration Ltd.
Although the Company was inactive in the area in 2005 due to partner priorities, this joint venture provides Rival with access to over 33 contiguous sections of land under attractive terms and conditions. The play has been evaluated with approximately 55 square kilometres of proprietary 3-D seismic coverage that has identified a number of drillable locations.
The Granite Wash locations on the western portion of this land block are the most prospective. Rival will seek additional partners for the drilling of at least one of these wells for the 2005-2006 winter season.
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