Diaz Resources to speed up development in Lloydminster
2009-06-01 07:48 ET - News Release
Mr. Robert Lamond reports
DIAZ UPDATES LLOYDMINSTER PROJECT
Diaz Resources Ltd. plans to accelerate its development activities on a section of landstrategically located in the Lloydminster area of central Alberta.
Diaz holds a 50-per-cent working interest in the section that presently has onehorizontal well, drilled in the fall of 2008, which is currently producing 63barrels of oil per day. The well has produced approximately 6,000 barrels ofoil to date.
Diaz is the operator of the lands and had planned to drill threeadditional wells on the section; however, the company has received a noticefrom its partner of its intention to file a holding application which wouldallow for up to 64 wells to be drilled on a 640-acre holding.
The partner is the operator of the section immediately to the north of theDiaz-operated lands and has drilled 31 horizontal wells to date on thatsection, in which Diaz has an overriding royalty interest. According to publicrecords, the production rates from those wells reached a maximum ofapproximately 1,320 barrels per day, with associated gas, and are currentlyproducing at a rate of over 1,180 barrels per day.
As a result of higher oil prices, encouraging production rates on Diaz'soil well, and the company's interpretation, based on geological and 3-Dseismic, that the entire section could be hydrocarbon bearing, the companyplans to focus its 2009 efforts on rapidly developing this oil pool.
In order to finance this development, the company is investigating anumber of financing alternatives. Diaz will also benefit, in the short term,from the new Alberta royalty incentive program which will defray some of thedrilling costs for additional wells and provides a lower royalty rate for thefirst year of production for the new wells.
We seek Safe Harbor.