In 2009, Nordic Petroleum’s Canadian subsidiary made a discovery of both oil and gas in its self-operated well Longco 16-25-14-22 W4 in the Little Bow/Carmangay area of Vulcan County. The low gas prices in North America makes oil production significantly more interesting than gas, but a subsequent test did not show a sufficient concentration of oil in the extracted fluid. The Board has however decided to return to this well and consider a more comprehensive test to determine the potential for oil production. A different technology will be used than in the last attempt, and if this is successful it will be possible to commence a limited commercial oil production.
The plan is therefore to conduct a new extensive test of the production capabilities and potential of the sandstone formations at approximately 1420 meters. This time we will attempt to improve the production capabilities by drilling horizontal channels out from the existing well bore. About four 100 m long horizontal channels in different directions will be drilled. The intended result is a significantly higher proportion of oil in the produced fluid.
Nordic Petroleum, through its wholly owned subsidiary, has a current interest in the discovery and well of 40.6%. Partner Skyway with 24.4% is also positive towards a renewed test. Zargon Oil & Gas Ltd. as licensee has a carried interest of 35% (see their activities in the Little Bow area http://www.zargon.ca/).
Operator for the project is our wholly-owned company Norwegian Petroleum Inc., and the project will require about 6 months from government permit application and authorization until completion Q2 2012.
Our preliminary reviews yield a project gross value in the range of CAD from 6 to 10 million on a 100% basis with success and expected production. This is based on market value of the expected production. The investment cost is estimated at CAD 0.5 mill. On that basis, we are considering various financing models that may also involve changes in ownership.
As soon as there is news, we will issue a new notice to shareholders.
Fredrikstad, Norway 04.10.2011
Nordic Petroleum AS
Contact Arild Tolfsen with enquiries,
Mobile : +47 93 09 98 59,
E-mail : email@example.com