Pemberton looks forward to economic growth



    CALGARY, Oct. 25 /CNW/ - (TSX.V:PBT, FSE:P5W) Pemberton Energy Ltd.
(Pemberton) wishes to announce that as a result of the successful conclusion
of technical work on the 3D seismic, Chapman Petroleum Engineering Ltd. has
recommended three firm drilling locations to the Company at this time,
targeting multi zone potentially gas bearing horizons in the Mesozoic
subsurface section.
    The first two proposed location would test a seismic amplitude anomaly
interpreted to be a Gething central channel complex with stratigraphically
trapped natural gas. The last location would test two zones, a Gething side
channel complex and a Notikewin AVO gas anomaly.
    The Gething formation is approximately 60 m thick in this area and
consists of fluvial-deltaic sands, silts and shale with a coal measures zone
approximately 24 m in thickness comprising the central section of the
formation.
    The Gething Formation on one of the proposed locations is interpreted to
have an anomalous thickness of 84 m due to a basal channel complex incised
into the underlying Jurassic Fernie Formation. The entire basal channel
complex is 22 m in thickness and consist of a lower channel complex comprising
three upward coarsening sands that are capped by a 5 m thick coal sequence.
This coal sequence can provide both a possible source and seal for any gas
reservoirs contained in the underlying basal channel sands. Net pay for
Gething producers typically is 3 to 5 m.
    The Notikewin Formation is a Lower Cretaceous clastic deposit
approximately 270 m shallower then the Gething Formation in this part of the
Western Canada Sedimentary Basin. The Notikewin Formation is approximately
65 m thick in the Fairview area and consists of fluvial-deltaic sands, silts
and shale. Immediately to the North of Pemberton's property the Gage Notikewin
A pool is producing gas from a structural stratigraphic trap. Clean and very
porous sands approximately 15 m thick are found in this pool. Gas pay averages
3.5 m over water.

    Economics
    ---------
    Economic evaluation of the Gething zone based on a model using
22 producers in this immediate area showed a best estimate of per well
prospective resources to be 2.1 BCF of recoverable gas with a best estimate
initial rate on 1.0 MMscf/d. Prospective resources are defined as those
quantities of oil and gas estimated on a given date to be potentially
recoverable from undiscovered accumulations. They are technically viable and
economic to recover. The unrisked expected mean value (EMV) for the 100% case
was $4,365,000 and the risked EMV for the 100% case was $971,000, both values
at a discount rate of 10%. The probability of success (POS) for the risked
case was estimated to be 33% with the capital exposure estimated to be
$700,000, the cost of drilling one exploratory well. As can be seen on the
risk analysis chart below, the minimum POS needed for this project to obtain a
10 percent rate of return is 14%. As POS was estimated at 33%, the drilling of
a Gething exploratory well is considered feasible.

    
    Gething Exploratory Well Best Estimate Prospect Analysis

    ECONOMIC PARAMETERS(*)

    Net capital Exposure, $         700,000
    Probability of success %             33


    TOTAL VALUES

    -------------------------------------------------------------------------
    Discount Rate %       Undisc.         5         10         15         20
    -------------------------------------------------------------------------
    Unrisked Value, $  7,883,000  5,719,000  4,365,000  3,458,000  2,816,000
    -------------------------------------------------------------------------
    Risked Value $     2,132,400  1,418,300    971,400    672,100    460,300
    -------------------------------------------------------------------------
    Minimum Prob of
     Success Req'd %         8.2       10.9       13.8       16.8       19.9
    -------------------------------------------------------------------------
    

    An economic evaluation of the Notikewin zone based on the Gage Notikewin
A pool showed a best estimate of per well prospective resources to be 1.4 BCF
of recoverable gas with a best estimate initial rate on 1.5 MMscf/d.
Prospective resources are defined as those quantities of oil and gas estimated
on a given date to be potentially recoverable from undiscovered accumulations.
They are technically viable and economic to recover. The unrisked expected
mean value (EMV) for the 100% case was $3,557,000 and the risked EMV for the
100% case was $772,000, both values at a discount rate of 10%. The probability
of success (POS) for the risked case was estimated to be 33% with the capital
exposure estimated to be $600,000, the cost of drilling one exploratory well.
As can be seen on the risk analysis chart below, the minimum POS needed for
this project to obtain a 10% rate of return is 14%. As POS was estimated at
33%, the drilling of a Notikewin exploratory well is also considered feasible.

    
    Notikewin Exploratory Well Best Estimate Prospect Analysis

    ECONOMIC PARAMETERS(*)

    Net capital Exposure, $         600,000
    Probability of success %             33

    TOTAL VALUES

    -------------------------------------------------------------------------
    Discount Rate %       Undisc.         5         10         15         20
    -------------------------------------------------------------------------
    Unrisked Value, $  4,928,000  4,154,000  3,557,000  3,085,000  2,705,000
    -------------------------------------------------------------------------
    Risked Value $     1,224,200    968,800    771,800    616,100    490,700
    -------------------------------------------------------------------------
    Minimum Prob of
     Success Req'd %        10.9       12.6       14.4       16.3       18.2
    -------------------------------------------------------------------------
    (*) Disclaimer: The net present value does not represent fair market
                    value of the property.
    

    The recognition of a basal Gething channel sequence from wells drilled in
the area has lead to the development of a play concept that was confirmed by
the seismic interpretation of the 3D seismic survey. Additionally, an AVO
interpretation of the 3D seismic done by Hampson-Russell has identified an AVO
gas anomaly in the Notikewin Formation. Economic evaluation both risked and
unrisked on the proposed 3 locations for immediate drilling is favorable.
    As a result of the technical work on the 3D seismic by Chapman
Engineering Ltd., deeper potentially oil bearing targets in the Paleozoic
subsurface section are also indicated by the interpretation but have not been
finalized.
    Pemberton also wishes to advise that it has engaged the services of Pajak
Engineering Ltd. as a Project Manager for the drilling of these wells. Pajak
Engineering Ltd. will provide Project Management, engineering and field
supervision for the surveying, construction , drilling, completion, testing
and reclamation operations. Pemberton has instructed Pajak Engineering Ltd. to
begin surveying and licensing for the wells immediately.
    Pemberton's immediate plan of action is to drill these three shallow gas
targets immediately, which, if successful, will provide significant cash flow
based on the economics seen in this news release. The first well to be drilled
will target multiple zones, Notikewin and Gething, as this drill target has a
potential to produce from both of these gas bearing zones giving the Company
necessary cash flow to develop next phase of the Company's drill program.
    Pemberton Energy's Ltd. principal business is the acquisition,
exploration and development of petroleum properties. The company continues to
focus on its primary corporate objective: the creation of value for
shareholders by identifying oil and gas accumulations with relatively low
geological risk but with substantial reserve potential.

    On behalf of Board of Directors

    "Richard Saxon"
    ---------------
    Mr. Richard Saxon, President

    Disclaimer: The Company relies on litigation protection for "forward
looking" statements. Actual results could differ materially from those
described in the news release as a result of numerous factors, some of which
are outside the control of the Company.

    TSX VENTURE EXCHANGE HAS NEITHER APPROVED OR DISAPPROVED OF THE CONTENTS
    HEREIN





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For further information: on Pemberton Energy Ltd. please contact (604)
269-9801

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