• Well work on Trusler #8 has progressed as planned with the Lower Shannon reservoir accessed today.
• Oil appears to be present in the Lower Shannon which is to be swabbed as planned prior to both reservoirs being re-perforated and swabbed.
• The pump will be installed in the Trusler #1 production well once work on Trusler #8 is completed this week.
• The Application for a Permit to Drill (APD) for Trusler #9 has been lodged with the Wyoming Oil and Gas Conservation Commission (WOGCC).
• APDs for two other planned production wells, Trusler #2 and Trusler #4 are to be lodged tomorrow.
BACKGROUND INFORMATION
A background summary, Elk’s field re-development plans, the potential oil volumes being targeted by this program, and forward plans were provided to the ASX in the release dated 15th April 2010. The re-development activities were last updated on the 30th September 2010; these releases and others associated with the re-entry of the Trusler #1 well and its extended production test (EPT) are also available on the Company’s website.
PROGRESS
The work-over rig on the Trusler #8 encountered additional concrete plugs which has added approximately one week to the drilling time to access the Upper and Lower Shannon formations. The Lower Shannon perforations were accessed today and oil has been circulated to surface along with the drilling fluids. The concentration of oil in the Lower Shannon will be assessed by swabbing tomorrow, prior to re-perforating both the Upper and Lower Shannon reservoirs and swab testing both formations to assess the oil concentration from the combined produced fluids.
Should the swab testing of Trusler #8 produce similar oil cuts to those encountered on re-entering and testing the Trusler #1 well, a sundry submission will need to be made to the WOGCC to have it approved and registered as a production well. Should this occur, then the work-over rig will be moved to re-enter Trusler #9 to complete it as the water injection well after setting the pump in Trusler #1. Three 400 bbl crude storage tanks will be delivered and installed on site this week.
On behalf of the Board.
Andy Rigg MD/CEO
