CALGARY, ALBERTA--TUSK Energy Inc. (TSX:TKE) announces positive results from its third quarter drilling program, record levels of production and plans for wells during the winter drilling season.
Production
Production during the third quarter averaged 5,026 boepd, more than double the 2,232 boepd of average production achieved during the third quarter of 2002 and 15% higher than production levels during the second quarter. Production was positively impacted by the acquisition of Sunfire Energy which closed at the end of June and negatively impacted by delays in the tie-in of additional compression at the Sunfire Blackfoot property and the shut-in of the Company's production at Shane for approximately 6 weeks. The additional compression at Blackfoot was operational at the end of July and the shut-in of the Shane production ended in mid-September (news release of September 15, 2003). Current production is approximately 5,900 boepd.
Third Quarter Drilling
During the quarter TUSK participated in the drilling of 19 wells resulting in 11 (5.9 net) gas wells, 3 (2.4 net) oil wells and 5 (1.6 net) dry holes. Eight (5.0 net) of the successful wells were shallow gas wells drilled on TUSK properties at Saddle Lake (3), Whitefish Lake (2), Radway (2) and Lodgepole (1). Two (.875 net) were drilled on the Siksika First Nation. Oil wells included a 100% working interest horizontal development well at Hartaven in August and a horizontal well at Buick Creek (0.44 net) and a 100% working interest new pool discovery at Gage late in the quarter. The Gage well will be completed early in November. Dry holes included potential high impact wells at Girouxville (0.50 net) and Carson (0.45 net). Five of the wells (3 gas, 1 oil and 1 dry) were drilled on recently acquired Sunfire properties.
New Pool Discoveries
The most significant discoveries of the third quarter were at Saddle Lake where the three (1.5 net) wells drilled encountered gas in a total of 15 separate zones and defined a number of new gas pools. Net reserves from development of the pools discovered by these three wells are expected to replace more than 50% of the reserves produced by TUSK during the 2003 fiscal year. Production from these new wells will not be onstream until the first quarter of 2004 after construction of new compression and gathering facilities.
Winter Program
TUSK will have an active program during the latter part of the fourth quarter and into the first quarter of 2004 with drilling planned at Saddle Lake, Whitefish Lake, Radway, Gage, Hartaven and on a number of high impact prospects. Six wells will be drilled to further develop new discoveries made during the year at Saddle Lake and Whitefish Lake. TUSK operates these properties and has a 50% working interest. Construction of a new compression facility and meter station at Saddle Lake will be completed early in the first quarter. TUSK now has 32 wells capable of gas production at Saddle/Whitefish and over the next few years will continue to develop the 80 sections of land which have not yet been evaluated. Additional drilling will occur at Gage (TUSK 70-100%) to further develop this area. TUSK has now drilled three high interest discoveries at Gage over the past 10 months. A number of shallow gas development wells will be drilled on TUSK properties at Radway-Thorhild, Lodgepole, Pembina and Norbuck. TUSK will operate most of these with interests of 50-100%. A multi-well horizontal oil development program (TUSK 35-50%) is underway in the Hartaven area.
Up to 5 high impact prospects, each targeting gas in the Slave Point Formation, are expected to be drilled. TUSK's interests after drilling range from 28% to 54%. Gross potential recoverable reserves range between 15 Bcf and 50 Bcf per well. All prospects are defined by 2-D seismic and four have 3-D seismic coverage. TUSK will operate three of the prospects.
TUSK is a rapidly growing junior oil and gas company with a solid base of production, balanced drilling portfolio, focused acquisition program and an active exploration & development program. Financial and operating results for the third quarter are expected to be released on November 14, 2003.
FOR FURTHER INFORMATION PLEASE CONTACT:
TUSK Energy Inc. Norman W. Holton President & Chief Executive Officer (403) 264-8875 (403) 264-8861 (FAX) Email: tusk@tusk-energy.com Website: www.tusk-energy.com
