Mar 17, 2004
Update to Shareholders
On March 16, 2004 the National Energy Board reported a drilling depth for the Wilma Summit Creek B-44 well of 2828 meters. The following will update shareholders: a partners meeting was held on March 15th at which the operator advised the drilling window is narrowing due to closure of the winter road and warming weather conditions. The operator also advised the time required to rig out and truck 70 loads of equipment south is approximately seven days, thus their recommendation was to cease drilling operations on March 16, 2004. After much discussion it was decided subject to safety considerations and daily weather conditions that we will try and drill to total depth of 3035 meters. It is important to mention that the rig sits on an ice pad and any melting of the ice pad will result in drilling operations ceasing immediately for safety reasons.
The goal at this point is to get the well drilled to total depth, run logs, and transport the rig south of Wrigley before March 25th. The current time line means that after log interpretation we will not be able to do any production testing if warranted. If we can not move equipment south via road we will have to stage equipment and transporting via river barge this spring, this option is expected to cost between $3 and $5 million, an expense that all of the partner's would like to avoid.
The most common questions asked by shareholders are;
1. What is the status of the well? Hopefully the above clarifies drilling status.
2. Why are drilling results held confidential? Firstly there is a land sale on June 7, 2004 that we are evaluating. Further we do not wish to share new seismic and well results, whether positive or negative, with industry in an area that is under explored when we have spent approximately $45 million to acquire this proprietary geological knowledge.
3. What is the status of Sidox? We are on track to begin field testing in the 2nd quarter, testing will take six months before meaningful results are known.
4. Why is the share price down? Given that we have not reached total depth and not yet logged the well we can not comment on the market activity. During recent financing the company sold 6 million shares and 2.4 million warrants at prices ranging from $0.15 to $0.30 per share and with the expiry of hold periods it is possible that some stock may have found its way into the market.
5. Berlin Listing? We are currently reviewing the listing and our association with Baltic Investment Group. To date we have not expanded our shareholder base in Europe.
Given the current status of the Summit B-44 well we decided to provide this update. In the future we intent to report on a quarterly basis or when there is a material change.
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