Small bits of Stealth's MD&A You can now find it on SEDAR...Here are bits...
The following is a brief description of the Company’s major properties:
Nova Scotia CBM
The Stellarton Basin - 100% working interest
The Stellarton CBM license is comprised of approximately 24,000 acres. There are 20 named coal seams with
individual seam thicknesses that range from 3 feet to 46 feet, found generally 500 to 5,000 feet below ground
surface with total net coal thickness of up to 400 feet. Coal ranks range from high volatile A to medium volatile
bituminous, with measured gas contents ranging from 100 to 330 scf/ton. CBM facilities include 3 suspendedvertical wells, 2 wells not completed (1 vertical, 1 horizontal), and a water processing facility. The Company, as
operator, is currently preparing to re-enter 3 wells and drill 1 well.
Stealth acquired a further P & NG Exploration Permit on and around Stellarton allowing the Company to produce
from non-CBM gas producing zones surrounding the Stellarton CBM license. The Permit consists of 118,050 net
acres, and was acquired from the Company’s Farm-in Partner for $150,000. The Permit requires Stealth to drill
one well within two years in order to earn the land.
The Cumberland Basin - 50% working interest - 1 well Farm-in to earn an additional 25%
The Cumberland CBM license is comprised of 177,000 acres. Total net coal thicknesses are up to 90 feet, found
generally 2,000 to 5,000 feet below ground surface. Coal ranks range from high volatile A to low volatile
bituminous, with measured gas contents ranging from 100 to 510 scf/ton. The Company, as operator, is currently
preparing to drill the first new well in the first quarter 2006.
The Cumberland license area is approximately 80 miles west of the Stellarton license area. Both projects are in
close proximity to the Maritimes & Northeast pipeline, and both are expected to have access to low-pressure gas
infrastructure currently being built by Heritage Gas of Dartmouth, Nova Scotia, in addition to other optionscurrently being discussed.
Shale Gas Acquisitions
Alberta
Subsequent to the end of the quarter, Stealth acquired a farm-in with a large Independent industry partner on
approximately 70 net sections (17,290 hectares/44,800 acres) of land in Alberta. These 70 sections lie within 9
contiguous townships. Stealth, as operator, has committed to drill one test well by the end of the first quarter,
2006 to earn a 50% interest in six sections of farm-out land. Stealth also has rolling options to earn the balance of
the lands under the same terms by drilling option wells. The earning period commenced on September 30, 2005
and ends on September 1, 2007.
Saskatchewan
Stealth acquired a 50% non-operated interest in three Exploratory Permits within the Province of
Saskatchewan. Stealth paid its portion of the deposits and is required to spend money to earn land. The total
land position equals over 1 million gross acres as follows:Foam Lake Special Exploration Permit 68
453,520 gross, 226,760 net acres. $1,618,396 total earning requirement over 2 years.
Shell Lake Special Exploratory Permit 67
196,770 gross, 98,385 net acres, $500,000 earning requirement over 2 years.
Moose Jaw Special Exploratory Permit 70
385,490 gross, 192,745 net acres, $1,786,554 earning requirement over 2 years.
Minor assets
At Elcott, Saskatchewan the Company owns a 40% WI in 3 producing oil wells and approximately 640 acres of
mineral leases. These wells, producing from the Midale formation, provided approximately 29.5 BOE/D net to the
Company during the third quarter 2005. The operator will be drilling another development horizontal well in the
first quarter of 2006. At Weyburn, Saskatchewan the Company has a 5% working interest (WI) in oil producing
assets. At Ferrier, Alberta, the Company has a 2% WI in gas producing assets.
Outlook
Stealth has acquired control ownership of the Nova Scotia CBM Project and has since added strategic land
positions to augment its opportunity in Nova Scotia. Its evaluation of the properties is well underway and a
resource report is expected by the end of the year from Sproule Associates Limited. This report will specify the
gas resource in place for Stealth and provide extremely detailed information relevant for drilling and development
planning. A test program is being designed that will stretch into and beyond 2006. This program is now funded
with the recent closing of a $13 million non-brokered equity private placement financing. In spite of the challenge
to contract adequate drilling services, the Company has arranged several sources for drilling and completions, and
services are currently being contracted. The Company is excited to see its program move forward, and we look
forward to spudding the first well in the first quarter of 2006. Several existing wells at Stellarton will be re-entered
and evaluated concurrent with drilling.
In Saskatchewan equal progress is evident. Stealth’s operating partner at Foam Lake, Shell Lake, and Moose
Jaw (PanTerra Resource Corporation) has issued AFE’s to the Company in order to spud its first well in the first
quarter 2006. Wells drilled several decades prior (which produced gas) exist on these properties, along with
several new wells recently drilled by a very large North American gas producer. Sproule Associates Limitedproduced a report for PanTerra dated October 31, 2005, indicating a resource of 4 BCF Original Gas in Place per
section. Stealth’s partner speculates in a recent press release (November 18, 2005) that 120 BCF could be
harvested from this resource, depending on several assumptions including recovery factor, etc. In due course the
Company will have a technical report to release that provides more detail. Stealth will be immediately engaged
with its partner to advise on testing, including relevant core drilling, on the new wells. This will enable a full
understanding of the shale gas potential available through the 1 million plus exploration acres. Stealth is very
excited about the potential for development on these lands and within its strategic focus.
In addition, the Company has recently completed a JV agreement in east-central Alberta with a large Independent
gas producer. Stealth is currently developing a plan to demonstrate the productive capability of shale gas on
these lands. This may lead to greater opportunity with its partner on a larger land base.
Stealth will continue to focus on its corporate strategy in unconventional gas, and it continues to examine and
pursue agreements and acquisitions to unlock further opportunity.
One important thing i read is that they have enough money and won't be doing another financing in the near future. So we won't be diluted like crazy for now!!!
If I didn't do the copy and paste right, just go to SEDAR. Not responsible for misplacing texts.