In 1992 Firesteel Resources Inc. purchased natural gas assets in the Sundance area for $192,500. These interests included:
  • A 7.5% interest in the 7-9-54-21W5M gas well - producing from the Triassic Coquina unit
  • A 7.5% interest in the gas processing plant and pipeline
  • A variable interest in 6 sections of land in the immediate vicinity of the producing gas well

Since the purchase, the 7-9 well has produced 600 million cubic feet of gas (net to Firesteel). An engineering evaluation shows that the well is capable of commercial production for another 8 years. This evaluation also assigned a present worth value of $285,600 (using a 10% discount value and escalated prices). The relatively high natural gas prices of the past year have resulted in greatly improved earnings for Firesteel.

Recently, the Sundance area has seen a dramatic increase in drilling activity mainly to evaluate the Faulted Cardium Formation. Dozens of wells have been drilled in the area to test this type of reservoir. A major field has been discovered to the south-east and a number of successful wells have also been completed to the north-west. Firesteel is in the enviable position of owning various interests in six sections of land in the center of this developing play. In April Firesteel participated (1.875% net interest) in the drilling of a well at 12-03-54-21W5M. Based on the logs, the well was cased and will be subjected to a production test in the summer of 2001. It is likely that several additional wells will be drilled on our lands in the foreseeable future. Fracture enhanced Cardium wells in this area can typically produce 2 6 million cubic feet of gas per day.