PetroFrontier Corp. (TSX: PFC) has reported a 2011 capex of $32 million that will be primarily devoted to drilling wells on in the Southern Georgina Basin, Northern Territory, Australia.
Capital Expenditures
PetroFrontier's board of directors has approved a 2011 capital expenditure budget of $32 million net to PetroFrontier ($32 million gross), consisting of drilling up to six exploratory wells and the acquisition of up to approximately 1,000 km of additional 2D seismic. The six planned exploratory wells consist of up to three unconventional horizontal wells and up to three conventional vertical wells. The planned 2D seismic program will be a further delineation to the approximately 550 km of 2D seismic PetroFrontier acquired during Q4 2010.
2011 Drilling Program
The first well to be drilled by PetroFrontier will be the first horizontal well (Baldwin-2) on EP 103. Baldwin-2 will be located close to the existing Baldwin-1 well. Baldwin-1 will be the pilot hole for the horizontal leg of Baldwin-2 into the Basal Arthur Creek shale zone. Baldwin-2 also includes conventional targets above the Basal Arthur Creek shale zone.
The second well expected to be drilled by PetroFrontier will be a horizontal well (MacIntyre-2) in EP 127, Northern Territory, Australia where PetroFrontier holds a 75% working interest and is also the operator. MacIntyre-2 is planned to be drilled in a similar manner to Baldwin-2 using the existing well as a guide for the new horizontal well. MacIntyre-2 also includes conventional targets above the Basal Arthur Creek shale zone.
The third well expected to be drilled by PetroFrontier will be a vertical well (Ross-2) in EP 103. Ross-2 will be drilled up-dip to the existing Ross-1 well to evaluate conventional targets both above and below the Basal Arthur Creek shale zone as well as the horizontal viability of the Basal Arthur Creek shale zone itself.
The fourth well expected to be drilled by PetroFrontier will be another horizontal well also in EP 103 into the Basal Arthur Creek shale zone. The fourth, fifth and sixth wells will be drilled based on additional seismic currently planned to be acquired in 2011.
PetroFrontier awarded the contract to drill four wells to Major Drilling Pty. Ltd. on November 19, 2010. The rig is currently undergoing final assembly and acceptance testing in Brisbane, Queensland, Australia. There has been significant local rainfall and flooding (with accompanying road closures) which has affected both the Brisbane area and much of the remainder of the State delaying the construction of the rig and its transport to the Northern Territory. When the rig acceptance process is completed and the appropriate road transit permits have been issued the rig will be moved approximately 3,000 kilometers (a significant proportion of which is across unsealed roads) to the Southern Georgina Basin to commence PetroFrontier's exploratory drilling program. PetroFrontier will provide a further update once an actual spud date for the first well has been confirmed with a greater degree of certainty.
2011 Seismic Program
PetroFrontier plans to conduct approximately 420 km of additional 2D seismic acquisition around the Ross-2 well commencing in May 2011 and approximately 540 km of additional 2D seismic acquisition around the Owen-3 well commencing in September 2011. The fourth, fifth and sixth wells planned to be drilled by PetroFrontier during 2011 will be drilled on locations determined based on this additional seismic.
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