Jumpbush/Milo

Petrobank’s Jumpbush property is predominantly located on the Siksika First Nation, one hour’s drive east of Calgary, where we are operator and 70 percent working-interest partner with Siksika Energy Resources Corporation (SERC). Our land base at Jumpbush consists of 73,636 gross acres (50,514 net acres) of under-exploited lands. Jumpbush is a unique opportunity as it represents a large island of undeveloped acreage on the Siksika First Nation’s reserve, surrounded by non-reserve lands that have been intensely developed over recent years.

The Company has a large inventory of low risk, multi-zone prospects exceeding 175 locations, extensive infrastructure and operates a gas plant with capacity of 25 mmcf/d (17.5 mmcf/d net).

The Belly River and Medicine Hat formations are productive throughout Jumpbush. The Belly River has several zones capable of natural gas production, with any individual well having a strong likelihood of encountering at least one of these. By contrast, the Medicine Hat contains a single gas-saturated, low permeability sandstone of variable productive capability. Petrobank has successfully applied 3-D seismic to identify certain prolific Belly River gas trends at specific horizons within the formation. Petrobank gained access to approximately 221 square kilometres of 3-D seismic through a series of acquisitions. Locations are selected according to the Belly River mapping, but are drilled to the deeper Medicine Hat.

In addition to natural gas, an extensive coal bed methane (CBM) resource is present in both the Belly river and Horseshoe Canyon coals. Other operators in the vicinity are beginning to develop these CBM resources. For Petrobank, this CBM resource represents a low cost recompletion candidate that could greatly extend our Jumpbush production profile for years to come.

In 2006, Petrobank continued to strengthen the Jumpbush/Milo asset by acquiring 5,552 net acres of land; shooting 16 square kilometres of 3-D and 48 kilometres of 2-D seismic; and drilling 50 wells (42.3 net), all successful, on acreage outside of the Siksika Nation. Overall, the ongoing development plan entails drilling 50+ wells per year.