Southern Alberta – Hooker Deep Gas.

Discovered by Compton in 1999, the Hooker asset is a low to medium permeability Basal Quartz channel sandstone pool, which is the southern Alberta extension of the Lower Cretaceous Deep Basin gas trend.  Compton controls 165 sections at an average 85% working interest in this area. Current production extends over five townships, and in February 2008, this large pool reached a production milestone of 100 BCF. With an annual pool wide base decline of 15%, the pool is a legacy asset with a predictable, stable, water free decline producing liquids rich gas.

 

Compton initiated horizontal drilling with multi-stage fracture stimulations in the pool with the drilling of one well in late 2007 and an additional four wells in 2008. The successful application of this technology could allow Compton to improve depletion economics, particularly in the tight early stage parts of the reservoir.

 

The Hooker play has historically been developed through drilling one to two vertical wells per section. Reservoir modeling indicates up to four vertical wells per section may be necessary to fully develop the play. In 2008, Compton successfully negotiated with the sole remaining partner in the pool to down space 45 of 57 developed sections to three wells per section. This will provide us with more latitude when establishing optimal well density in order to maximize value of our depletion strategy. The 12 remaining sections have sufficient drainage with current well densities to adequately access the reservoir.

 

In 2009, we plan to optimize our existing gas producers and, with more favourable commodity prices, continue building on our success in 2008 by drilling one to three horizontals in addition to select vertical locations. Several locations have been identified for potential drilling or refracturing of existing wellbores in the latter half of the year, provided that they meet Compton’s internal rate of return hurdles. Through selective drilling and pool wide optimization, Hooker's depletion strategy can be optimized to enhance capital efficiency.