Drilling at Southern Plains. Click on image to view larger version.

The Southern Plains play is an under pressured, essentially water-free, multi-sand zone that averages 450 metres in thickness and totals over 900 metres including the overlying Edmonton, sand, coal Group. Compton has over one hundred low risk development locations surveyed and licensed in this area. The entire section is comprised of multiple Belly River sands, silts, shales, and coals, overlain by the Edmonton/Horseshoe Canyon coals that similarly include sands, silts, and shales.  With control of over 700 gross sections of land at an average 80% working interest, this land base translates to a significant multi‑year, low risk drilling inventory at four wells per section. We currently have ample infrastructure in the area for future production additions with 31,000 horsepower of compression and approximately 1,300 kilometres of pipeline.

 

In 2010, six Belly River Formation wells were drilled and brought on production. Production rates exceed historical averages, reflecting the success of Compton’s ongoing emphasis on identifying optimal Belly River targets. Detailed analysis of the reservoir was completed, identifying several deeper opportunities for development. Once gas prices improve, we can commence infill drilling to fill existing compression. On a go forward basis, Compton anticipates that the majority of its lands will be developed at the government approved spacing of four wells per section on this shallow low risk gas play.

 

The shift in focus to deeper, higher rate targets in the Southern Plains area commenced in 2010 with three successful operations. One Glauconite drill yielded an initial rate of 1.5 MMcf/d and two Glauconite recompletions averaged 0.75 MMcf/d. With this success, we will continue to focus our investment on deeper targets in the Southern Plains, providing additional opportunities for Compton. In addition, an Ellerslie Formation horizontal oil well was drilled in late 2010. Initial indications are promising with approximately 700 metres of pay being encountered in the wellbore.

 

In 2011, we will focus on our emerging oil opportunities in the Southern Plains. Further development of the Ellerslie and Mannville Formations is planned, which provides significant upside potential for the Corporation. Compton will also pursue the development of its 24 net prospective sections of Alberta Bakken oil prospects, targeting the Big Valley Formation. There is potential to further reduce operating costs and optimize operations in this area, which will further improve the economics of the play.