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Re: wshaw14 post# 1872

Monday, 02/23/2015 12:35:37 PM

Monday, February 23, 2015 12:35:37 PM

Post# of 2589
It was recently determined that the drilling of an additional SAGD well pair and the associated expansion of the current SAGD plant facility has been deferred due to the recent decline in oil prices. However, it was also determined that the operator of the SAGD Project will proceed with the Phase 2 front-end work, which includes work on preliminary engineering design, regulatory approvals, environmental approval work and determining regulatory requirements sufficient to define the work program.

Results to date indicate that the use of SAGD technology is successful in producing oil in the form of bitumen from the Bluesky reservoir. Based on 100% working interest (we have 25%), for the months of October, November and December of 2014, monthly gross oil sales averaged 109, 153 and 209 barrels of oil per day, respectively. For the first half of January 2015, gross oil sales averaged 244 barrels of oil per day. These early stage production numbers along with the steam oil ratios compare favorably to analogous reservoirs in thermal recovery projects operated by other companies of similar reservoir types that we and the operator of our joint SAGD Project are monitoring and using as a basis of comparison.