On October 1, 2007, Pearl announced that it will acquire PetroHunter Energy Corporation's heavy oil assets located in Montana and Utah . The assets being acquired include a 100% working interest in several large resource heavy oil development projects referred to as Fiddler Creek, Promised Land, West Rozel and Gunnison Wedge.
The Fiddler Creek Heavy Oil Project is located within the Montana portion of the Big Horn basin of north-central Wyoming and south-central Montana . The primary target zones are heavy oil saturated marine and fluvial sandstones of the Lower Cretaceous Greybull and Pryor formations. Previous production has been from 17 vertical wells and one horizontal well.
The Company initiated the assessment and development of this area in December 2007 by drilling an appraisal well, Beartooth Federal 43-33, into the Fiddler Creek field of Stillwater County, in southern Montana. The well was drilled into the main structure of the property, the Fiddler Creek Dome, in order to extend the known limits of the southwestern portion of the field, and it will be further evaluated during the first half of 2008 to validate reservoir continuity and potential reserve additions. In addition to this well, an existing well, Mowell #1, was recompleted for evaluation. Both wells are connected to tank facilities to gather reservoir and production data that will be used to confirm and complete a field development study.
The Company expects to drill an additional appraisal well following regulatory approvals in the second half of 2008. This work is in preparation of future field development which, beginning in 2009, is anticipated to include horizontal development drilling in order to establish commercial production rates, installation of production facilities, acquisition and analysis of additional geophysical data, and examination of enhanced recovery methods.
The West Rozel Heavy Oil Project is located within the Great Salt Lake basin of north-central Utah . The target reservoir consists of a series of stacked, fractured Pliocene basalt flows that are referred to as the West Rozel Basalt. The reservoir is both extremely permeable and heterogeneous. Three wells have penetrated the heavy oil deposit in this field, with two having extensive production tests.
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