Access to the RBC Rundle VIRTUAL DATA ROOM requires registration by execution of a project confidentiality agreement. To register please contact Jill Switzer: 403 299 8446
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Grizzly Resources Ltd. & Ironhorse Oil & Gas Inc. |
Bids Due: June 16, 2011 |
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Contact: 403-299-8453
403-299-8455 |
Introduction Letter | Foreword & Disclaimer | Shackleton
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SHACKLETON
HIGHLIGHTS
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OPPORTUNITY
Grizzly Resources Ltd. (“Grizzly”) and Ironhorse Oil & Gas Inc. (“Ironhorse”) (collectively the “Companies”) are offering for sale each of their 50% working interests in the Shackleton gas property described within this Information Memorandum. Grizzly is the operator of the property. The disposition of both Companies’ interests willbe conducted through asset sales.
LAND
The Companies combined land footprint in the Shackleton Field is 16,154 gross acres. Ownership in each section of land is split 50/50 between the two Companies for a combined working interest of 100%.
PRODUCTION
Production data at December 2010 shows the field producing 7,944 Mcf/d (sales) of sweet natural gas from 100 wells. All of the production is from the Milk River Formation.
Initial development on the Companies lands was initiated in 2006 on two sections with seven wells. An additional 30 wells were drilled in 2007 and 63 more in subsequent programs. All of the wells are producing today.
RESERVES
In aggregate the Companies were assigned 23,025 MMcf (3,838 Mboe) of Total Proved Producing plus Probable Producing gas reserves. There were no Proved Undeveloped reserves assigned since neither Company budgeted drilling in the near term. The field has a Total Proved plus Probable reserve life index of 7.1 years.
FACILITIES
The Companies own a sweet gas facility at 16-29-021-19W3 as well as the associated gas gathering system. The gas is compressed through two compressors and delivered to market through the Transgas system at 7,000–8,000 kPa. Major equipment at the facility includes: two Compressors, Inlet separator, De-hydration Unit, Double Wall Water Vessel, and Water Tanks.
MARKETING
There is currently a firm service agreement with Nexen Marketing for 6,350 GJ/day that expires October 31, 2011.
GEOLOGY
The Upper Cretaceous Milk River Formation contains one of North America's largest unconventional gas accumulations. The zone is characterized by huge areal extent, shallow depths, low formation pressure, large in-place gas reserves and long reserve life. The Milk River forms a northeasterly tapering clastic wedge that extends across southern Alberta and southwestern Saskatchewan. Regionally, deposition changes from mostly shallow marine shoreline and coastal facies in the southwest, to deeper marine shelf facies in the northeast as shown on the diagrams on this page. Within the confines of individual fields the reservoir facies is usually somewhat homogeneous and predictable. Several stacked sand sequences contribute to production.
THE ABBEY-LACADENA FIELD
- Offsetting competitor development currently at 80 acres spacing surrounding the Companies’ land
- Shackleton field development currently at 160 acres spacing
DEVELOPMENT POTENTIAL
The Abbey-Lacadena Field accumulation was discovered in 1999 with the first development well drilled in 2002. It is estimated the Milk River Formation in the field has an OGIP of ~980 Bcf (675 Bcf recoverable). To date, a majority of the field has been drilled to eight wells per section, in contrast to the Companies’ Shackleton project which has only been developed to four wells per section. Competitor development immediately offsetting Company lands provides strong demonstration of incremental reserve capture at 80 acre spacing. An additional 100 infill drilling locations are possible on the Companies’ lands at the reduced spacing.