As a consequence of successful commercial oil production from the White Hat 20#1 vertical well, the Operator of that well, Carl E Gungoll Exploration LLC has decided to drill a second vertical well, offset approximately 1500 metres to the north-east of White Hat 20#1.
This new vertical well will spud tomorrow. CEGX will have a 50% working interest in the new White Hat 21#1 vertical exploration well as well as in the surrounding 40 acre drilling unit. Winchester Energy Limited will own the other 50% working interest in the White Hat 21#1 vertical exploration well along with a 50%WI in the surrounding 40 acre drilling unit. Each party will pay 50% of the costs of the White Hat 21#1 vertical well.
CEGX's budgeted cost for the White Hat 21#1 well is a total of US$1,140,000. This is comprised of US$420,000 for drilling and US$720,000 for completion. Winchester's 50% share therefore is US$210,000 for drilling and US$360,000 for completion.