Junex’s US-Based Partner Releases Information About the Utica Shale Play in Quebec
QUEBEC CITY, QUEBEC–( EMWNews – April 1, 2008) – Junex’s (TSX VENTURE:JNX) joint venture partner, Forest Oil Corporation has issued a press release this morning in relation to its St-Lawrence Lowlands activities. The press release refers to Forest Oil Corporation’s on-going works in accumulating an interest within 269,000 net acres in the St-Lawrence Lowlands part of which are located on Junex’s properties. A total of 55,000 acres are located in the Contrecoeur area (33,000 net acres to Forest and 22,000 net acres to Junex at the end of the commitment period) and 155,000 acres are located in the Becancour area (net to Forest but subject to a 5% overriding royalty interest convertible to a 15% working interest in favour of Junex).
Forest may earn its working interest in the Shale section of such properties after having invested, during the commitment period, a total of 13 million USD. Furthermore, Junex owns 1 million shares or approximately 2% of Gastem Inc, the other joint venture partner involved in Forest Oil Corporation’s Utica Shale play in Quebec. As of today, Junex holds interest in a total of 1,102,055 net acres in the St-Lawrence Lowlands in Quebec. In the event Forest Oil Corporation is in compliance with its investment commitments at the expiration of the commitment period and provided Junex has converted its 15% working interest in the Becancour play, Junex will still hold interests in 937,305 net acres of land in the St-Lawrence Lowlands.
According to Forest Oil Corporation’s press release:
“Over the last two years, Forest has accumulated approximately 269,000 net acres, under lease or farm-out, in the St. Lawrence Lowlands in Quebec, Canada. Two vertical pilot wells were drilled in 2007, testing the Utica shale, to a total depth of approximately 4,800 feet. Production rates tested up to one million cubic feet equivalent per day. Although the play is still in the early stages, Forest believes the initial results are encouraging due to the following factors:
– Shallow depth of the shale;
– Rock properties are comparable with other more established shale plays;
– High-quality natural gas with minimal impurities;
– Infrastructure in place with nearby access to major pipelines;
– Premium natural gas pricing to NYMEX makes the economics compelling.
Forest plans to drill three horizontal wells in 2008 to refine its drilling and completion techniques. Based on technical data and the vertical pilot well program (Forest Oil has disclosed a non-compliant disclosure of a resource estimate, under Canadian regulations). First production is expected in 2009 with the potential for a full-scale drilling program in 2010 and beyond.”
Junex holds exploration rights on more than 6 million acres of land located in the Appalachian basin in the province of Quebec. Recent major discoveries in the United States and Eastern Canada have stimulated exploration in Quebec, which is located in a favourable geological setting for oil and gas discovery. Junex’s strategy is to reduce exploration risks by entering into partnerships with other exploration companies. In parallel to its exploration efforts, Junex goal is to achieve positive cash flows from its natural brine and drilling services operations. Junex also holds approximately a 9.4% interest in Petrolia (TSX VENTURE:PEA) and a 2.2% interest in Gastem (TSX VENTURE:GMR).
The TSX Venture Exchange has neither approved nor disapproved the information contained herein.
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