TORONTO, Dec. 20 /CNW/ - United Hunter Oil & Gas Corp. (UHO: TSX-V). Gaffney, Cline & Associates (GCA) evaluated United Hunter Oil & Gas Corp.'s ("UHO") Resources in the Huasna field, San Luis Obispo County in California. GCA served as independent resource evaluators. The firm's officers and employees have no direct or indirect interest holdings in Huasna. GCA's remuneration was not in any way contingent on reported resource estimates. GCA classified the resources as Contingent Resources in accordance with the reserve and resource definitions set out in the Canadian Oil & Gas Evaluation handbook (COGEH), which also forms part of the Canadian National Instrument 51-101. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. The major contingency at Huasna is securing the necessary permits from the regulatory authorities. UHO owns 65% of the 160 acre project area of the Huasna field through the Excelaron Joint Venture. On the remainder of the field area UHO holds variable interests and has verbal agreements on the remaining interests with the other mineral rights owners in which they concur to allow leasing of those interests once the first phase of development is permitted by the regulatory authorities. The readers are cautioned that there is no certainty that it will be commercially viable to produce any portion of the resources.
The Huasna field is located in the Huasna basin and is a fault related anticlinal structure that produced heavy oil from the Monterey Formation. The Huasna basin is located northeast of and on trend with the prolific Santa Maria Basin. The oil column at Huasna field has been reported from depths of about 270 feet to 3,000 feet and consists of fractured shale containing 8.5o to 13o API oil. Seven wells were drilled in the field between the years 1937 and 1965. Drilling and production commenced in the late 1950's reaching peak production in 1966. The field was shut in with a cumulative production of about 23,000 bbls of oil.
UHO's current development plan targets a proposed project area of 160 acres in size and contains the existing wells and is designed to have the least surface impact; vertical and directions wells will be drilled from central locations. An upside to this project is that the potential structure might be 600 acres in size.
GCA made volumetric estimates of the Discovered Petroleum Initially-In-Place "PIIP" using the existing well information and references appropriate field analogs. GCA gives expected recoveries at Huasna of 4-6% of the Discovered PIIP for the hot water stimulation process that UHO plans to test and implement at Huasna. According to GCA's estimates the P50 Discovered PIIP is 96 MMBbl with net UHO recoverable of 2.7 MMBbl; the P90 Discovered PIIP is 44.6 MMBbl with net UHO recoverable of 1.2 MMBbl, and the P10 Discovered PIIP is 174 MMBbl with net UHO recoverable of 5.1 MMBbl. The Discovered PIIP estimates are for the entire field area. Net UHO recoverable volumes are based on the assumption that UHO's 65% interest in the 160 acre project area will apply to the remainder of the Huasna field. The volumes have been reduced for royalties. Recoverable volumes are classified by GCA as Contingent Resources as of July 31st 2010 and estimated in accordance with the reserve and resource definitions set out in the Canadian Oil and Gas Evaluation Handbook COGEH, which also forms part of Canadian National Instrument 51-101.
Total Petroleum Initially-In-Place (PIIP) is that quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. It includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered (equivalent to "total resources"). Discovered Petroleum Initially-In-Place (equivalent to discovered resources) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production.
Another upside to this project is that similar fractured shales have been shown to recover 20-40% of the Discovered PIIP when steam injection was used. Steam flooding to the extent that is technically applicable to Huasna would require considerable investment and special permitting in compliance to environmental regulations.
Dr. Arthur Halleran, CEO of UHO states that "Huasna is an exciting opportunity for UHO as the Huasna field could contain a substantial amount of recoverable oil".
United Hunter Oil & Gas Corp. (www.unitedhunteroil.com) is a Canadian based corporation with management very experienced in the oil and gas industry and has projects in California and Canada. United Hunter Oil & Gas Corp. is publicly traded on TSX Venture Exchange (TSX-V: UHO). The Corporation's public filings may be found at http://www.sedar.com.
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