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