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Junior explorer sees Arctic light
Gary Park For Petroleum News
Next to MGM Energy, International Frontier Resources is a junior explorer with high hopes for Canada’s Arctic.
And it shows no signs of shedding that optimism, diverting money from the sale of a British North Sea property to the Central Mackenzie Valley of the Northwest Territories.
It said the C$3.8 million it expects to collect from the asset disposal will be spent on further northern exploration of a region where its interests range from 8.22 percent to 25 percent in 735,000 net acres, which contain three Significant Discovery Licenses, four Exploration Licenses and three freehold parcels of land.
In its fourth quarter of 2009 report, IFR said the absence of approval for a pipeline down the Mackenzie River Valley is a positive.
It conceded that until there is a northern gas pipeline there is no commercial method of moving gas from the region to market, although crude oil or natural gas liquids could be fed into Enbridge’s pipeline from Norman Wells to northern Alberta.
Land prices good On the flip side, however, it said the absence of a gas line means land in the central portion of the valley is available for prices below what would prevail if a pipeline was in place.
At April 20, IFR said it had working capital of about C$7.63 million, restricted cash-securing work deposits in the Northwest Territories of C$640,670, no debt and about 59.6 million shares outstanding.
For the three months ended Dec. 31, it produced a mere 34 barrels per day of oil and natural gas liquids and posted a loss for the quarter of C$5.45 million and for 2009 of C$14.71 million.
Through a series of joint ventures, IFR has been involved in spending about C$185 million on exploration, resulting in the first hydrocarbon discovery south of the Norman Wells oil field.
The Summit B-44 well flowed 20 million cubic feet per day of gas and 6,300 barrels per day of condensate on a production test.
The best estimate of contingent resources for the well is 38.7 billion cubic feet of gas and 6.08 million barrels of oil.
A second find was made 25 miles south of the Summit well, with the Stewart Lake well testing at 5 million cubic feet per day and yielding a best estimate of contingent resources of 20.8 bcf.
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