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Our Oyen core area is located west of the Saskatchewan border approximately 175 kilometres east of Calgary, Alberta. This core area produces primarily natural gas from more than ten different horizons and our control of infrastructure provides a strategic advantage and a barrier to entry for our competitors. Our original core area continues to provide new discoveries and trends that permit numerous follow-up locations.
Our 2008 average production rate in the Oyen core area was 3,558 Boe/d (20.5 MMcf/d of natural gas and 146 Bbls/d of oil) and our 2008 exit production rate was approximately 3,485 Boe/d. Our operations in the area include six main processing facilities and a number of field compressors connected through an extensive network of gathering lines. Our dominant position in Oyen ensures a high degree of flexibility in operating the production and controlling the pace of development with the area.
This core area contains 224,000 acres of undeveloped land with an average working interest of 85%. The Oyen core area also contains over 263,000 acres of land that is considered to be developed but is included in the area that received downspacing approval from the Alberta Government in 2006. Our extensive 2D and 3D seismic database enhances the prospectivity of both our developed and undeveloped lands in the area.
In 2008, we had a very successful drilling program in our Oyen core area and identified several trends with follow-up locations. We drilled or re-entered
34 (28.3 net) wells and achieved an average success rate of 94%, resulting in 31 natural gas wells, 1 oil well, and 2 dry holes.
For 2009, new wells in Oyen will receive substantial economic benefits from the royalty incentive programs announced on March 3, 2009, where 1,000 metre wells costing between $225,000 and $250,000 to drill will receive a $200,000 drilling credit, which can be applied against NuVista's 2009 crown royalties.
May 2009 |
