Petsec Energy is pleased to announce that it has agreed to participate in a shale oil project in Alberta, Canada where it can earn a 24.5% working interest in leases covering 17,280 acres. To earn its interest in the leases, the Company will pay 35% of the costs to drill one initial commitment well and 35% of the costs of drilling up to three optional wells.
The initial commitment well is expected to spud before the end of February 2012. The results of the well will be extensively evaluated over a 3 –4 month period after which the Company can elect to participate in the drilling of the first optional well.
Petsec’s Chairman, Terry Fern, said 'This is a significant step in the Company’s transition to securing and developing unconventional oil assets. Success in the initial drilling is expected to result in the acquisition of further acreage within the play which holds the potential for a sizeable shale oil project.'
The project is located in the prolific Western Canadian Sedimentary Basin, which contains one of the world’s largest reserves of petroleum and natural gas. It is Canada’s largest hydrocarbon producing province and accounts for approx. 90% of the oil and gas produced within the country. The first discovery in the basin was made in 1883, and production to date has exceeded 13.7 billion barrels of oil and 47 trillion cubic feet of natural gas.
Further details relating to the initial commitment well will be provided at the time the well spuds.