Approval of waiver request for coring and water source testing in Chard Oilsands by Statoil Canada, as part of Statoil Canada winter drilling program 2010
Nordic Petroleum has approved a waiver request from Statoil for coring and testing the water and formation quality in the Chard license. The drilling will be executed as part of Statoil’s winter drilling program 2010. According to the waiver request and our approval, all well data, lab results and interpretation of the results from the testing will be made available for both parties. Further, if Statoil find the water of good enough quality for their planned use, and want to use this source of water for their development, it is a requirement that the parties enter into a commercial discussions and subsequent agreement of common use of the water resources in the license.
The water resources Statoil wants to use is located on the license held by Norwegian Oil Sands Corp. a fully owned subsidiary of Nordic Petroleum ASA. The location of the well is east of the estimated closure of the oil bearing sand and presumed to be water bearing sand zones.
The condition for requesting commercial agreement for use of the water by Statoil is based on our own plans to develop and produce hydrocarbons from the lower and upper McMurray oil sands formation. Positive results for Statoil may imply reduced costs for water needed by Nordic Petroleum for future development of Chard.
The results from the drilling executed by Statoil may also give us indications on how far east the oil bearing formation stretch in our license. Future production rates and recovery in Chard will depend on the water resources and drainage of these.
Nordic Petroleum ASA has a budget of NOK 3 mill for further drilling and core sampling in the Chard license. The geological study from DeGolyer & McNaughton indicate that Nordic Petroleum have 296-352 mill barrels Original In Place (OOIP), and 94 mill barrels in zones of recoverable oil. A second independent evaluation of the oil sand deposits is Sogning, who give a considerable higher OOIP estimated to 352 million barrels and recoverable 176 million barrels.
The company will be the Operator of the development, and have 100% working interest (WI) in the license. The report from Degolyer & MacNaughton and Sogning indicates that the quality of the oil in the Chard license is in the area 8-12 API. Average API quality in Athabasca Oilsands Area is 8-9 API. Sogning writes the following in his study; ”Based on log interpretation of 120 in and surrounding wells to the Norwegian oil sands lease, the existence of oil sand are very well defined and proven.”
Calgary, Canada/Fredrikstad, Norway February 2nd 2010
Norwegian Oil Sands Corp/ Nordic Petroleum ASA
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