Southeast Alberta And Southwest Saskatchewan

Drilling and Optimization Activity Boost Production

ARC has held a presence in this area since 1999 when it acquired the Jenner shallow gas assets. In 2002, ARC completed 12 small acquisitions and expanded its ownership in existing lands. The assets in the area are comprised of sweet gas fields with low operating costs. Through the Star acquisition, ARC gained three important new properties in southwest Saskatchewan – Hatton, Horsham and Crane Lake. Thru 2004 to 2006 ARC has embarked on extensive shallow gas drilling in this area. 2006 marked the third consecutive year that ARC has drilled greater than 100 shallow gas wells. Average daily production in 2007 decreased slightly to 10,040 boe/d from 10,743 boe/d in 2006.

Area In Detail

Key to Success - Shallow Gas

Shallow gas production in Southeast Alberta and Southwest Saskatchewan dates back to the 1950s. This area delivers dry, sweet gas production with low decline rates and low operating costs. ARC first entered the area in 1997 with acquisitions in Jenner. Currently our average working interest in the area is 77 per cent. In 2007, ARC spent $39 million (including non-operated) and drilled 58 wells in Crane Lake, 64 wells in Jenner, 22 wells in Horsham and 62 wells in Princess Alberta. We also recompleted 20 wells for bypassed uphole pay.

In 2008 we expect to spend $31 million in this area and plan to drill 111 shallow gas wells and perform 20 uphole completions and other optimization activities. The drilling potential in this area is significant. Brooks is currently developed to eight wells per section. Surrounding areas have been drilled to 16 wells per section by other operators. If ARC decides to drill its assets to 16 wells per section, there are an additional 230 potential locations in Brooks. In Hatton we are currently developed at five wells per section. Our development target is eight wells per section, which represents an additional 150 potential locations. If we drill to 16 wells per section we can identify another 400 possible locations. In Crane Lake 125 locations will bring the field up to the appropriate density target.

Information updated to year end 2007

Field Office

Superintendent: Kevin Jones
Box 970, 1751 Highway Avenue SE, Redcliff, Alberta T0J 2P0
Tel: (403) 548-0014-----Fax: (403) 548-0088