By OGJ editors
HOUSTON, June 18 -- Paramount Resources Ltd., Calgary, said an acquisition of western Canadian properties expected to close at the end of June will add close to 40 MMcfd of natural gas and 3,300 b/d of oil and natural gas liquids to its production.
The properties being acquired contain proved and probable reserves of 93.6 bcf of gas and 6.7 million bbl of oil and NGLs. Paramount's 2003 yearend proved and probable reserves were 329 bcf of gas and 12.5 million bbl of liquids.
The purchase price is $189 million (Can.) subject to adjustments. The properties are in Paramount's Kaybob, central Alberta, and Fort Liard, NWT, core areas and in Northeast British Columbia.
Paramount is buying the properties from one of two Canadian royalty trusts that purchased a combined $1.09 billion of properties from Chevron Canada Resources Ltd.
Kaybob is Paramount's largest core area. The Kaybob assets to be acquired include interests in:
-- The Kaybob North Beaverhill Lake Unit No. 1, which has produced more than 200 million bbl of oil
-- The Notikewin unit, which has produced more than 600 bcf of gas and includes individual wells that have produced more than 60 bcf of gas
-- The Fox Creek Viking Pool, which has produced more than 200 bcf of gas
-- The Kaybob South Units Nos. 1, 2, and 3, which comprise the Kaybob South Pool, the largest gas pool ever discovered in western Canada, which has produced more than 5 tcf of gas
-- The Simonette Units A and B, discovered in the early 1990s
-- 140,000 net undeveloped acres on the W6 deep basin play.
Assuming completion of the acquisition, Paramount forecasts its production to average 180 MMcfd of gas and 7,500 b/d of oil and NGLs for all of 2004. Its late May production, including the acquisition, approximates 200 MMcfd of gas and 9,000 b/d of oil and liquids.
Paramount told investors this month that it plans to drill 60 infill and 10 exploration-extension wells at Kaybob and 60 wells in the Grande Prairie area in 2004.
Cameron Hills startup
Separately, Paramount also is producing oil and gas from Cameron Hills field in the Northwest Territories just northeast of the northwest corner of Alberta.
Gas production began Mar. 29, 2002, from 6 wells. The discoveries were made 10-35 years ago.
Paramount installed a $5 million tank battery at Cameron Hills. It began light oil production in April 2003 from 5 wells through a 72 km pipeline to Bistcho Lake, Alta., and then through a new $5 million, 55 km, 4-in. pipeline to a connection with the Rainbow Pipeline at Zama Lake.
Target rate of 1,500 b/d of oil was reached in November 2003, but first quarter 2004 net production averaged 15 MMcfd of gas and 547 b/d of oil due to mechanical and operational difficulties.
The 2004 program calls for drilling three development wells and two exploration wells at Cameron Hills. Oil and gas are found in structural and stratigraphic traps in the Middle Devonian age Slave Point, Sulphur Point, and Keg River formations.
Paramount sees significant potential in the area. It holds subsurface rights for close to 80,800 acres of land including 19 surface leases, 12 significant discovery licenses, 5 commercial discovery declarations, and 7 production licenses.