progress is good but a little slower than expected

May 23, 2005
CARPENTER PACIFIC PROJECT ACTIVITY UPDATE
JEFFERSON-MCLEOD PROJECT
Production
Current gross gas production in Texas is approximately 2.3 million cubic feet
equivalent per day (“mmcf/day”), or 550 mcf per day net to CPC. At the current
gas price of approximately US$7.00 per mcf, there is an operating margin of
US$5.85 on a unit basis. Operating expenses per mcf are expected to decrease
as the company’s development program leads to increased production.
Operations – East Texas
Huntington-2H
In the completion process, the company is continuing to recover acid fluid from
the Huntington-2H well at the 30% owned Jefferson-McLeod Project in East
Texas. At the same time, the company has experienced equipment shortages
symptomatic of a tight oil field services market.
The company decided to acidize the well in order to optimize the ultimate
recovery. The well is currently utilizing gas lift to extract the acid fluid from the
well bore. The well is actually producing gas and condensate, but a stable rate
will not be established until the spent acid has been recovered. Due to the fact
that the pressure in the reservoir is lower than normal (as expected), this is
taking longer than anticipated. Once the remaining acid fluid has been
recovered, it is planned to put the well on compression to enhance gas flows,
after which it is expected that a stabilized flow rate will be established.
Permits have been submitted for drilling two additional horizontal wells, one on
the Harris lease and the other on the Childers lease. We would
anticipate commencing drilling in June on the first of these wells, targeting the
Pettit or Rodessa reservoirs.
Recompletions
To date the company has recompleted the Harris well, which increased flow rates
from 70 mcfe/day to 600mcfe/day. The company is finalizing the recompletion of
another well, the Bramlett which is about to come on stream. Also, the company
is beginning a new four well recompletion program on the Huntington, Davis,
Childers and Walker leases.
HELPER PROJECT - UTAH
Carpenter Pacific has drilled two wells in the Helper Project in central Utah, the
Kennilworth RR #1 and the Kennilworth RR #2. The wells are currently shut-in,
awaiting completion. It is anticipated that completion activities will commence
within the next two weeks
CLEAR CREEK PROJECT - UTAH
Following the completion of the Helper wells, Carpenter is planning to move the
completion rig to the Clear Creek Project to commence a three well recompletion
program.