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Saskatchewan Shale Gas
PanTerra has focused its exploration for Shale Gas in the Colorado Formation in Saskatchewan. This zone extends across the entire southern portion of the province with relatively uniform thickness. During the mid 1950s a number of deep Devonian exploration oil wells were drilled by major oil companies in this region. Gas prices were in the order of $0.15/mcf and infrastructure did not exist. These wells, drilled with very heavy, clay rich drilling fluids caused severe damage to shallow gas zones. As a result few gas wells were tested, however those that were tested, invariably yielded varying amounts of gas.
PanTerra recognized this potential and after extensive review of geological records and studying public information chose to focus its “shallow gas” exploration in three major areas in the province; Shell Lake, Foam Lake and Moose Jaw. The Company acquired a 100% working interest in three Exploration Permits totalling 1600 sections (square miles) or some 45 Townships. This huge land base has allowed PanTerra to spread its risk from a geographical and geological point of view and to launch an extensive drilling program to test and high grade these lands for further development.
To date PanTerra has drilled a total of 36 wells on all of its three properties and has invested a total of $10.5 Million. All technical information received to date indicates sufficient gas in place to warrant further exploration and development. Additionally the Saskatchewan government has adjusted royalties for this type of gas to be in the three to five percent range making the economics quite favourable.
The Company’s Exploration Permits have come to the end of their primary five year term, so the company has high graded their lands and chosen to retain 112,160 acres over the three areas where it operates. Because of the expenditures to date, the company will enjoy a rental free period for these lands for the next two years.
PanTerra's intent has been to drill for and establish shallow gas on our properties, with the further intent of establishing a Net Asset Value (NAV). Once the NAV has been established PanTerra may choose to entertain offers from well financed major companies to develop the resource or the Company may choose to sell its asset.
Due to very low natural gas prices, the company has its Saskatchewan project on the back shelf as it focuses its efforts on its 100% controlled oil properties in Alberta. The company has been approached by two entities that one, may be interested in purchasing PanTerra’s Saskatchewan interests and the other whom may want PanTerra to ‘roll in’ their Saskatchewan properties into a newly formed entity.
The company executive is currently evaluating these two proposals.