Palisades Petroleum Corporation (OTC: PAPT)
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Palisades Petroleum Corporation is a growth-oriented junior resource company engaged in the exploration, development and production of oil and gas in Montana, North Dakota and South Dakota, Wyoming and Colorado. The Company finances early stage and advanced stage prospects, and then works with joint venture partners to finance and operate the appropriate drill programs.
Pheir experienced management team is actively sourcing, financing, exploring and developing a number of domestic oil and gas projects. To date they have assembled several early stage oil and gas properties in Montana.
"Fossil fuels will continue to dominate global energy use, accounting for some 85% of the increase in world demand." - World Energy Outlook 2004
With this increased demand in oil and gas, Palisades' objective is to become an emerging growth player in the global race to successfully put into production new oil and gas properties. The Company intends to finance both early stage and advanced stage prospect development and will seek joint venture partners to finance and operate drill programs. It has already contracted oil and gas properties in Montana and North Dakota.
Palisades is already producing natural gas from its North Buffalo prospect. The first well drilled on this property is producing 283,000 cubic feet of natural gas per day and the Company believes additional wells could increase daily production to 1.8 million cubic feet of natural gas per day.
The North Buffalo prospect is estimated at contain as much as four billion cubic feet of natural gas and benefits from the presence of a nearby transportation pipeline already in place. The Company has already hooked up the pipeline and is shipping natural gas from this property.
Palisades minimizes its risk by acquiring properties that can be developed using horizontal drilling at relatively shallow depths and working with joint venture partners. Its joint venture partner on the North Buffalo prospect is privately-held Cline Production Company, a local Montana company.
The Company has acquired an additional development project covering 3,900 acres of land in Montana and believes this prospect holds significant undeveloped reserves.
Long-term growth in energy demand and prices will provide Palisades with a ready market for future production. US oil consumption is expected to increase 34% to nearly 27.6 million barrels per day by 2025 and natural gas consumption will rise 40% to 31 trillion cubic feet.
Horizontal Drilling
The use of horizontal drilling technology in oil exploration, development, and production operations has grown rapidly over the past 5 years. Horizontal drilling technology achieved commercial viability during the late 1980s and was initially successfully deployed in the Bakken Shale of North Dakota and the Austin Chalk of Texas. This subsequently encouraged its use in many other domestic geographic regions and geologic situations. Of the three major categories of horizontal drilling, short-, medium-, and long-radius, the medium-radius well has been most widely used and productive. Achievable horizontal bore hole length grew rapidly as familiarity with the technique increased; horizontal displacements have now been extended to over 8,000
Greater Formation Exposed to the Wellbore in a Horizontal Well (A) Than in a Vertical Well (B)
feet. Some wells have featured multiple horizontal bores. Completion and production techniques have been modified for the horizontal environment, with specific adaptation to geologic environments and the production history of reservoirs which also determines the completion methods employed. Most horizontal wells have targeted crude oil reservoirs.
The objective of horizontal drilling is to expose significantly more reservoir rock to the well bore surface than can be achieved via drilling of a conventional vertical well. Objectives relate to specific physical characteristics of the target reservoir and provide increased economic benefits. Technical objectives include the need to intersect multiple fracture systems within a reservoir and the need to avoid unnecessarily premature water or gas intrusion that would interfere with oil production. The economic benefit of horizontal drilling success is increased productivity and prolongation of the reservoir's commercial life.
Domestic applications of horizontal drilling technology have included the drilling of fractured conventional reservoirs, fractured source rocks, stratigraphic traps, heterogeneous reservoirs, coalbeds (to produce their methane content), older fields (to boost their recovery factors), and fluid and heat injection wells intended to boost both production rates and recovery factors. Significant successes include many horizontal wells which have produced at 2.5 to 7 times the rate of vertical wells - in both North Dakota and Texas.
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