Portal agrees to take part in Saskatchewan oil play
2011-03-28 05:13 ET - News Release
Mr. David Hottman reports
PORTAL ENTERS BIRDBEAR OIL PLAY IN WEST CENTRAL SASKATCHEWAN
Portal Resources Ltd. has entered into an agreement to participate in the development of an oil play in west central Saskatchewan. Under the terms of the agreement between Portal and a private, Canadian oil and natural gas producer, Portal has the right to earn a 25%, non operating, working interest in a total of four sections of land (2,560 acres). A 25% working interest in the first two sections will be earned by participating in, and paying a 50% cost share of, the drilling of one vertical and one horizontal well. An interest in an additional two sections of land will be earned with participation on a "straight up basis" (25% of costs for a 25% working interest).
Modeling of newly acquired 3D seismic data suggests that there is extensive development potential directly offsetting the production on adjacent lands within the Birdbear Formation. Recent activity has seen several major producers drilling 6 - 10 horizontal wells per section into this formation and reporting initial production rates in the range of 100 - 150 barrels of oil per day with low to moderate finding and development costs.
The Birdbear Formation lies at a depth of approximately 750 meters, is 5 to 7 meters thick and due to the fact that it is a carbonate unit that has undergone dolomitization, shows porosity up to 15%; in this area of Saskatchewan the formation yeilds heavy oil at 13 degrees API. The Birdbear Formation correlates to the highly productive Nisku Formation in Alberta.
Drilling operations are scheduled to commence after spring breakup. Completion operations will consist of an acid wash and squeeze using coil tubing prior to the commencement of production.
It is anticipated that each of the horizontal wells will qualify for the Province of Saskatchewan's drilling incentive program on the first 100,000 barrels of production. A minimum 2.5% government mineral tax will apply.
"We are very pleased to be involved with this play as it represents a relatively low risk opportunity for production in a play that has significant upside," stated David Hottman, Chairman, CEO.
We seek Safe Harbor.
