Exploration of Cold Lake oil sands

Cold Lake area Chiefs and the First Nations exploration company Keyano Pimee Exploration Company Limited are in advanced negotiations with Indus Energy NL (formerly Quest Petroleum) to farm in to 82,290 acres of Cold Lake oil sands. Once the joint operations agreement is signed, Indus will begin Phase 1 of the work program which will consist of low cost re-entry of four historic wells in areas where oil has been encountered during gas production activities on KPECL lands. Priority is to look at a program of low cost re-entry wells while also taking advantage of the current market conditions which is seeing debt-forced sale of land positions in the Cold Lake area of interest. This provides a significant opportunity for acreage covering known heavy oil sands occurrences, already been freed up, to be snapped up at low acquisition and holding costs to add to existing and planned joint land positions. This would result in the added benefits of the Phase 2 conventional vertical well program being scheduled over a larger geographical area with the aim of delineating significantly increased reserves for similar expenditure. Significantly, Cold Lake recovery economics demonstrate viability even at current oil prices and the likelihood of a speedy, low-cost pathway to production revenues for Indus and KPECL.