MGM readies Mackenzie well

Northern Canadian explorer MGM Energy is engaged in logistics planning and procurement to drill a vertical well this winter in the Central Mackenzie Valley, targeting the Canol oil shale.

MGM acquired the land in 2011 and 2012 and will drill the well as operator under a farm-out agreement with Shell Canada.

Shell has agreed to fund the drilling and completion of up to two wells in the Canol play to earn up to a 75 percent interest in MGM’s Exploration License 466B.

Currently MGM is pinning its hopes of production on completion of a project that allows commercialization of its northern natural gas resources or the successful development of the Canol shale.

MGM recorded exploration expenses of C$1.18 million in the third quarter, primarily the result of computer upgrades and hiring geological and geophysical employees and consultants.

Exploration spending for the first nine months of 2012 was C$2.73 million, including C$600,000 of land costs.

—Gary Park