Vangold: Papua New Guinea's Gold

SUBJECT: From VAN Posted By: marketminer : 10/19/05 14:48


Natural Gas Is Where It’s At ... broker’s picks
by Dorothy Hoffert

For a number of years, mining exploration has been my primary interest as far as exploration for economic mineral commodities are concerned; however, it is impossible to ignore the current extreme exploration activity in the oil and gas sector. There is great potential for capital gains to be achieved by investors owning shares of companies, senior or junior, which are participating in oil and gas plays. I am following one such play taking place in the Foothills of Alberta in an area described as favourable for both stratigraphic traps, typical of the plains area of Alberta, as well as the thrusted targets of the Foothills.

The primary objective is natural gas from the Mississippian-Turner Valley formation. In nearby lands to the south, Shell Canada Ltd. [SHC-TSX] drilled two wells in l953 and l958 that have accumulatively produced in excess of 180 billion cubic feet of gas to date and continue to produce in excess of 1 MMCF of gas per day. Much news will be forthcoming as the drilling and testing programs continue over the next few months.

Tower Energy Ltd. [TWR-TSXV], Golden Cariboo Resources Ltd. [GCC-TSXV], Montello Resources Ltd. [MEO-TSXV] and Vangold Resources Ltd. [VAN-TSXV] are participants in the drilling of a deep test well located on the Tsuu T’ina First Nation (Sarcee Indian Reserve) land immediately west of the City of Calgary, Alberta.

The companies have acquired the right to earn working interests (Tower 5%, Golden Cariboo 5%, Montello 2.5%, Vangold 6%) in a four-section, 2,560-acre petroleum lease known as the Sarcee Project. Regionally, the Tsuu T’ina Lands
are on trend with numerous producing fields encompassing several prospective horizons. The target on this acreage, referred to as the 12-13 Mississippian Test
Well, is a potential 20-billion to 50-billion gas reserve from the Mississippian-Rundle formation identified by 3-D seismic surveys.

Similar targets in this region feature high deliverability gas accumulations, demonstrating long reserve life indices that could be produced into third party facilities.

The operator has announced the well has been drilled and has reached the Mississippian target depth. The well has been cased to 3,160 metres and logged
to a total depth of 3,254 metres. An open hole completion and testing of the
primary target is planned with regulatory approval expected imminently. Test
results are pending and, if successful, up to three other wells can be drilled on
this acreage.

Tower Energy holds a 25% working interest in an additional 30 sections totalling
19,200 acres, which surround the Deep Mississippian Play. These leases are
located on Tsuu T’ina First Nation land. Tower considers these Sarcee Lands to
be the prime asset of the company. These lands are considered to have the potential to produce natural gas from four different formations, in particular the Horseshoe
Canyon (for its coal bed methane
potential), Belly River, Cardium and
Blairmore horizons. Drilling, completing
and production from these wells differ
from development of the deep wells from
the Mississippian formation. Coal bed
methane wells are characterized as shallow,
ranging from 300 metres to 1,200
metres in depth. Density is usually four
wells per section, dependant on factors
such as coal thickness and completion
technologies. The drilling program will
begin shortly, but is dependant on availability
of drill rigs. Coal bed methane well
drilling is the fastest growing segment of
the gas industry.