Schematic of typical horizontal well. Click image for full-size view.

The Niton area in central Alberta, 150 miles west of Edmonton, is also in the Alberta Deep Basin fairway.  Our main targets are the Jurassic Rock Creek and Cretaceous Gething, analogous to the Hooker pool in southern Alberta. Proprietary exploration, development, and operational knowledge gained in southern Alberta has resulted in accelerated growth of this core area.  In 2007, we drilled 35 wells at Niton and Caroline.

 

We experienced significant drilling success with our Rock Creek horizontal gas well program at Niton in 2007.  The average cost to drill and complete a Niton horizontal gas well is $4.5 million, or roughly two times the cost of a comparative vertical Rock Creek gas well.  With a 30 day initial production average of 5.0 mmcfe/d per well, horizontal wells produce about four times that of a comparative vertical well.  Compton’s average horizontal gas well is 2,600 meters deep and has a 1,000 meter open-hole section.  Multiple open-hole packers are set within the horizontal section and three to four staged hydraulic fractures are completed.  At year end, we had eight Niton horizontal Rock Creek wells on production.  Six of these wells were gas wells and two were oil wells, with the gas wells producing approximately 16.2 mmcfe/d in aggregate and the two oil wells were producing a combined 153 boe/d.

 

To date in 2008 we have drilled two additional horizontal wells at Niton and a third well is currently drilling. The first well tested 3.0 mmcf/d and most recently, the well at 4-27-52-17W5 completed at the end of February is currently flow testing at 11 mmcf/d. The third well is scheduled to be completed later this month.  Production from these wells will be facility constrained pending the completion of additional compression and gathering lines.  This work is currently underway and is scheduled for completion by the end of March barring any delay resulting from an early spring break-up.  A total of 10 additional locations are planned for this area in 2008.

 

In 2008, Compton’s Niton budget plans for 15 horizontal wells using this multi-stage frac technology.  Last year’s focus by a number of producers, including Compton, targeted the Compton discovered Edson Rock Creek P pool.  Following the Niton Rock Creek successes, Compton posted and acquired a 100% interest in 12 sections of mineral rights on a second Rock Creek discovery.  Late in 2007, Compton drilled Edson 00/01-31-052-16W5M/0 discovery well on this 100% block of land.  This well was successful and is currently producing at 3.5 mmcfe/d.

 

All major compression equipment has been ordered for this play and we are currently drilling the third and fourth horizontal wells in this play.  Pending break-up and drilling success, we plan to have eight 100% working interest horizontal wells on stream by the end of May 2008.

 

For 2008 we have allocated approximately $135 million or 33% of our total planned capital expenditures to our central Alberta resource play.  We plan to drill 48 wells in this area, with 13 of these wells slated to be horizontal.  The 2008 plan is to continue to aggressively drill similar Rock Creek plays and to transfer this multi-staged horizontal fracture technology to other Compton operated deep basin gas plays throughout Alberta.