Exall Energy Corporation

A new oil discovery in Exall's expert hands

Based in Canada, Exall Energy Corporation is a junior oil and gas exploration and production company developing a number of currently producing, long life oil and gas assets—assets located in the prolific Western Canadian Sedimentary Basin (mainly Alberta).

The company, which was formed in December 2006, was the direct result of a spin-out of oil and gas assets previously held by Exall Resources Limited, which then changed its name to Gold Eagle Mines Ltd. Following the name change, the company successfully merged with partner Southern Star Resources Inc., and acquired of Kingsmere Exploration Ltd. in January 2007—forming Exall Energy. The company is listed on the Toronto Stock Exchange under the symbol “EE”, a laundry list of accomplishments to boast.

The most exciting announcement of late is the Marten Mountain oil discovery this year, which is part of a trend that the company has been drilling since 2007. According to Exall, the Marten Mountain oil discovery has the potential to “substantially increase Exall’s oil production.”
Exall also has producing natural gas assets in Texas, U.S.A., and looks to continue building its production and asset hold through strategic acquisitions and “the drill bit”.  

Exall’s strategy is to:

- focus on building shareholder value in the oil and gas industry
- enhance shareholder value through exploration and development and selective acquisition opportunities
- continue to increase its oil production as a result of the recent Marten Mountain discovery made during the 2010 winter drilling program, and a – disciplined capital program focused on developing light sweet crude opportunities, and existing good production practices and pool optimization strategies.

Exall’s strategy plays out across its international and domestic portfolio spread, with Marten Mountain continuing to deliver promising results.

International oil and gas

Nestled in Harrison County, Texas, approximately 150 miles east of Dallas, is Exall’s Susan B. Harris / Layton Liquid rich natural gas project. Spanning 1,055 acres (gross), 1.6 sections (gross) and 56.5 acres (net), 0.1 sections (net), the asset’s primary production comes from the Cotton Valley Sandstone geography of the locale. There are currently 11 producing gas wells, with production rates of approximately 188 boe/d and a net to Exall of approximately nine boe/d. Operationally; Susan B. Harris/Layton currently produced multi-well gas facilities which are operated by Cornstock Oil and Gas with a one per cent to 7.7 per cent working Interest to Exall. This is a strong project which adds a significant input to the company’s overall production base and highlights Exall’s keen eye for key projects in all manner of locations.

Domestic Oil and Gas

Aitken Creek  The story of Exall’s Aitken Creek project, located in British Colombia, dates back to December 15, 2004 when at the Crown Land Sale, the company and its partners acquired four sections of undeveloped land.

“This acreage is prospective for natural gas in several formations but will require additional seismic data to confirm specific drilling locations,” Exall says.

“On January 27, 2005 Exall and partners drilled and cased an exploratory well on the Aitken Creek natural gas prospect near Fort St. John in northeast British Columbia.”

At this time, Exall held a 12.5 per cent share in the costs of the drilling, which subsequently demonstrated good reservoir and production characteristics. Higher water saturations were also found, leading the consortium to elect to suspend further development until commodity prices improve sufficiently to continue with a more shallow formation. The project remains promising and in 2006 Exall rose to 22.5 per cent interest in the project after buying out the share in it of another company, Watt Energy.

Bow Island  Exall has a 20 per cent interest in the Bow Island project, situated in 200 kilometres Southeast of Calgary, Alberta. This project stretches 40 acres (gross), 0.06 sections (gross) and eight acres (net), 0.01 sections (net) and today offers great geological promise. The current primary producing horizon of this electrified low-operating cost project is the Glauconite channel, and coupled with 3-D seismic coverage turning up development locations and the infill well order which allows drilling within an inter-well spacing distance of 50 metres, it is plain to see why Exall selected this project for its portfolio. Bow Island has one producing well today which is operating at a rate of approximately 10 bopd and the net to Exall is approximately two boe/d.

Jayar  Located approximately 80 kilometres southeast of Grande Prairie, Alberta, is Exall’s Jayar project; home to 16 producing wells offering approximately 750 boe/d (6:1) of Sweet 40o Oil and 1,175 BTU Gas and NGL’s. Exall’s part in Jayar is a 7.25 – 14.5 per cent Working Interest, with the outstanding 92.75 – 85.5 per cent held by Twin Butte Energy Limited under Operating Interest.

“The wells currently produce to a multi-well oil battery complete with a solution gas processing facility for the recovery of hydrocarbon liquids and sales compression,” Exall says.

Mitsue Overlea/Black Spruce  This Sweet 36-41o  API Oil project, located approximately 200 kilometres Northwest of Edmonton, Alberta, is 8,160 acres (gross), 12.7 sections (gross) and 4,862 acres (net), 7.6 sections (net) is home to two producing wells which total around 50 bopd. Exall holds a working interest of 41.16 to 100 per cent and operates the project. The primary producing horizon is the Gilwood Formation from two zones and today the wells produce to single well batteries while the operated water injection wells and associated facilities offer pressure maintenance to the operation.

Mitsue Marten Mountain  This is the Sweet 40o API Oil project garnering great attention following the recent discoveries from the drilling program and is located approximately 200 kilometres Northwest of Edmonton, Alberta. There are three producing wells which offer an estimated 1,190 bopd and as operator Exall holds a 59.34 to 73.89 per cent working interest [approximately 790 boe/d net to Exall]. The project spans 9,160 acres (gross), 14.3 sections (gross) and 6,024 acres (net), 9.4 sections (net), in which the primary producing horizon is the Gilwood Formation from two zones. It is here with Marten Mountain the company’s future plans for development are unfurled.

The next step for Exall

Plans for Marten Mountain in the coming months include four drills for the summer of 2010 and two wells planned for the fall of 2010. Without question, these further developments to the project stem from detailed research and the overwhelming experience the wider company has as a result of its variety of projects. Most recently on July 14, the company’s Second Quarter Operations Update announced that the latest Marten Mountain well [announced on April 13 when it was drilled in the “B” Sand project area and uncovered two zones of productive oil-saturated reservoir sandstone] has been successfully completed, tied-in and placed on production [in the 10-25 discovery]. The company also drilled the first of the four wells in the 10-25 discovery well [in the “B” Sand area] which is expected to be completed, tied-in and in production by the third quarter, 2010. It was also announced that a mid-year resource update will take place and results announced alongside second quarter financials during August. By all accounts, Exall continues to develop this new oil well discovery in a timely and expert manner, and Marten Mountain looks increasingly more exciting for the company’s shareholders.