q'tly out---still no real new news

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Carpenter Pacific Resources Ltd.
ANNOUNCEMENT TO THE AUSTRALIAN STOCK EXCHANGE: 28 April 2005
MARCH 2005 QUARTERLY REPORT
The Directors of Carpenter Pacific Resources Ltd. (“Carpenter”) are pleased to present their
report for the March 2005 quarter.
HIGHLIGHTS
• Successful re-completion of Harris well at Jefferson-Mcleod project in East
Texas
• Commencement of horizontal drilling program at Jefferson-Mcleod with
spudding of the Huntington 2-H well
• Commencement of drilling program at Helper in Utah with the spudding of
the KKR#1 and KKR#2 wells
• Completion of the sale of the Company’s interest in the Maari Oil Field
Project in New Zealand
OPERATIONS
USA OIL AND GAS INTERESTS
Jefferson-Mcleod Project – EAST TEXAS
•
Drilling Program and Results
Harris Well Recompletion
In February 2005, the company successfully completed the perforating and fracing of the
Petitt reservoir in the Harris well at the Jefferson-McLeod Project in East Texas. The
successful re-completion of this well has resulted in a substantial increase in production
with the well initially producing at a rate of approximately 600 thousand cubic feet (mcf)
equivalent a day at a sustainable rate. Prior to the re-completion this well was producing
at a rate of approximately 70 mcf equivalent per day. The well is connected to a pipeline
and the gas is being sold.
Carpenter Pacific has a 30% interest in this well. At the current prices for gas of US$7
per mcf, this well will net greater than US$6 per mcf after operating costs. This would
equate to a yearly net cash flow to Carpenter of approximately US$350,000. Carpenter
Pacific’s share of the cost of the re-completion was approximately $US15, 000.
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The success of this recompletion confirms the validity of Carpenter Pacific’s strategy of
redeveloping low pressure reservoirs that were prematurely abandoned in a low price gas
environment and which have already produced over 3 Trillion cubic feet (tcf) of gas
equivalent in the area that Carpenter Pacific is developing.
Huntington #2-H Well
In February, the Company spudded its first well at the Jefferson-McLeod Project. The
Huntington #2-H is the first horizontal well drilled by the Company on the Project
acreage. The well will target the Upper Pettit horizon. -The well reached a total depth of
approximately 6,433 vertical feet and a horizontal section of approximately 987 feet.
This was 387 feet longer than the originally intended 600 feet of horizontal section. The
horizontal section in the targeted Upper Petit reservoir is gas saturated. Since reaching
total depth, delays in testing and tying the well into production facilities have been
experienced due to the current shortage of oil field services and the time taken to clean
out the horizontal section of the well. Testing operations are currently underway.
Following the completion of the Huntington #2-H well, Carpenter plans to drill the
second horizontal well in its East Texas program on its Harris lease. This well will target
the Lower Pettit reservoir and will be followed by a third horizontal well targeting the
Rodessa reservoir.
• Expected 2005 Drilling Program for the Jefferson-McLeod Project
The above mentioned plan is the initial phase of an 18 month work program involving
drilling of up to 17 wells, additional re-completions and land acquisitions. Estimated
capital expenditures of US$7.5m are to be funded out of discretionary cash flow and
working capital.
• Jefferson-McLeod: - Background
The Jefferson-McLeod Project is a re-development of the large Rodessa Field, and other
reservoirs in the area (Petit, Travis Peak, Cotton Valley and Bossier) located in the NE
corner of Texas. The Rodessa Field has cumulative production of some 390 million
barrels of oil (“mmbbl”) and 2.5 trillion cubic feet (“tcf”) of gas.
The Rodessa Field was first discovered in 1930 with most production occurring prior to
1960. Historical production occurred against the background of low gas prices (typically
less than US$0.20 per thousand cubic feet (“mcf”)) when oil was the primary focus and
gas was of little commercial value.
In addition, E&P technology has significantly improved since the Rodessa Field was last
developed. Together, these two factors support the potential for significant new
economic reserves to be developed from the Rodessa field and associated zones.
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Helper Project - UTAH
On December 9, 2004 the Company announced that it entered into an agreement to
acquire a 72.5% working interest in a significant coal bed methane play in the Uinta
Basin, Utah, USA (the Helper Project) located in a proven prolific gas producing area.
The Helper Field has produced some 55 billion cubic feet (“bcf”) of gas from the Ferron
coal and sands. The company believes that the shallower Blackhawk coals are also
potentially productive and will be exploited. Carpenter currently has secured leases over
3,700 acres and has options over another 2,500 acres and will act as operator of the
project.
Based on empirical data of recoveries from the Helper field, Carpenter anticipates
successful wells could contain recoverable reserves of at least of 1.4 bcf per well.
• Current Drilling Program and Results
In March 2005, the Company spudded its first well at the Company’s Helper Project in
central Utah (the “Project”). The well is known as the Kennilworth Rail Road #1 (“KKR
#1”). Drilling targeted the Ferron Sands and Coals. The KKR # 1 is a vertical well and
the first of a multi-well drilling program on the Project acreage.
On March 19, 2005 the well reached the targeted total depth of 4,600 ft. After setting
production casing, the Company expected to spud the Kenilworth KKR #2 in the first
week of April one half mile north of the KKR #1. Following the drilling of the KKR #2,
completion operations will commence on both wells
• Expected 2005 Drilling Program for the Helper Project
The Kennilworth wells are part of a planned multi-well drilling program to be drilled in
2005.
NEW PROJECT – CLEAR CREEK, UTAH
Clear Creek Unit
On February 22, 2005 the Company entered into an agreement to farm into the Clear
Creek Unit subject to satisfactory due diligence and documentation. The Unit comprises
of approximately 17,800 acres.
The Clear Creek Unit is located approximately 12 miles west of the Drunkards Wash
field in the Uinta Basin in central Utah. The field was drilled in the 1950’s and mostly
produced through the early 1970’s on 640 acres spacing. It has produced 130 Bcf of
natural gas from conventional reservoirs. In the company’s opinion, the spacing was not
sufficiently tight to drain all the gas in place. Each individual well probably only drained
40 to 80 acres leaving a significant amount of gas in the reservoirs. Independent
engineers have estimated significant potential reserves in the Ferron sands in addition to
the Ferron, Blackhawk and Emory coals. Unrisked, potential reserves in the area could
be in excess of 500 Bcf*.