Two shallow vertical wells with dual zone potential are also planned at Milton to test a strong target within a closed structure in the Bakken, as well as a broad stratigraphic trap at the Jurassic/Mississippian unconformity that also produces oil in the immediate area. Both sites have been surveyed in preparation for drilling. The unconformity target is only 100 metres below the Viking, and the Middle Bakken sand is only 140 metres below the Viking in this area. There is a former Bakken oil producer on the property, and a well only 200 metres outside the property boundary formerly produced oil from the Success Formation at the Jurassic/Mississippian unconformity. The prolific Hoosier Bakken oilfield surrounds Petro One's property on the west, north, and east sides, and the nearest active Bakken well is located 1.2 kilometres to the east. The Bakken on the J5 Milton property was initially credited with a NI 51-101 prospective resource of 798,000 barrels (News Release November 14, 2011).
On the Bromhead J10 property, seismic has indicated several more low risk horizontal development drilling locations on the three quarters of a section that remains 100% owned by Petro One, close to the 107 bopd farmout discovery (Petro One News Release January 21, 2013). These horizontal drill locations should be amenable to cost-effective open-hole completions. The Company is currently considering expressions of interest regarding this farmout opportunity, and looks forward to continuing to unlock the value of this property.
SOUTH RESTON, MANITOBA
On the South Reston J4 property (2.25 sections), recent detailed seismic interpretation has clearly identified a large carbonate mound in the Lodgepole Formation. This is a large reef-like structure 100 metres thick and measures 2.6 square kilometres in extent, and has a strong resemblance to Waulsortian mounds that are highly productive oil producers in the Williston Basin. A 1,000 metre vertical well has been proposed to test this large mound, which is a strong drill target with excellent upside potential.
On the Kirkella J3 property, a site has been surveyed for an 800 metre vertical well targeting seismically indicated porosity in an undrilled area updip of the Kirkella Lodgepole oil field. Two of the nearest producers at the north end of the field had three month initial production of 418 and 251 bopd respectively. Bakken production in the immediate area confirms that the 100% owned J3 property has good dual-zone potential.
The Company's 100% owned Hardy-Minton properties total two sections. The recent discovery of Bakken oil has generated new activity in the Hardy South-Minton area. New horizontal wells are now targeting oil in the Bakken very close to Petro One's 100% owned J11 and J19 properties, which are within 200 metres of the nearest and some of the most highly productive Red River wells in the Hardy South area. The best Bakken well drilled to date terminates only 250 metres from the J19 property, and had a 3 month IP of 109 bopd. Another horizontal Bakken well was recently licensed parallel to and only 150 metres from the west boundary of J19, further confirming the strong dual-zone potential of Petro One's properties in this area.
Petro One's initial drill hole at 11-29-4-23W1 on its 100% owned J1 Rosebank property produced oil at a steady rate from the top of the Alida Beds. The property is adjacent to strong, long-lived producers in the Rosebank oil field, but the target Frobisher Beds above were tight at this location, and the well had to be shut in due to a consistently high water cut attributed to the Alida Beds. The high water cut is understood to be due to the close proximity of the regional oil-water contact two metres below the lowest perforations in the Alida zone, and the high porosity and permeability of the reservoir. Recent re-evaluation of 3D seismic has indicated several intersecting low amplitude trends in the Frobisher that are structurally higher than the Alida Beds and are interpreted as porous. These indicated porous trends start about 250 metres from the 11-29 well bore and extend into the northwest, northeast, and southwest parts of the property. They are far enough above the known oil-water contact to make very attractive targets for horizontal drilling. The Frobisher Beds continue to be successfully developed with horizontal drilling in many parts of southeast Saskatchewan, including this area. A horizontal development well is recommended to target this zone, which is indicated to be porous and oil-bearing, and should be amenable to cost-effective open-hole completion.
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