Benefits of the Business Combination
The business combination will provide DualEx with additional capital for its expanding international exploration and development program, provide domestic development drilling opportunities, along with cashflow to offset its Canadian G&A expenses. Following Winslow's sale of its Leader property earlier this month, Winslow has proved plus probable reserves of 384 million cubic feet of natural gas and 8 thousand barrels of oil.
The business combination will allow Winslow shareholders to participate in DualEx's international exploration and development portfolio, currently consisting of the following projects:
Pannonian Basin, Hungary
DualEx has a 37.5% working interest in the 614,000 acre Nyirseg North and South Exploration Permits, which include the once-productive Peneszlek field. As part of the early stage re-development program at Peneszlek, in addition to tying-in the Company's PEN-104 discovery well, DualEx and its partners have commenced the necessary permitting and approval work regarding the re-entry of two existing gas discoveries, PEN-9 and PEN-12, with the goal of establishing production therefrom. Collectively, these three wells tested over 7.5 million cubic feet per day of natural gas. Work is underway to establish integrity of the existing gathering system and once complete will pave the way for the commencement of production. DualEx is targeting this winter season (2007/08) for first production in Hungary.
In addition to the development efforts at Peneszlek, DualEx and its partners are formulating the go-forward exploration plans for the Permits, which are significantly underexplored, having less than 40 wells drilled to date on the entire 614,000 acre block.
Block XVII, Syrian Arab Republic
Field operations are well advanced on DualEx's exploration program on Block XVII, with the 1100-plus kilometer 2D seismic survey scheduled to be completed in August 2007. DualEx and its partners expect to have processing and interpretation completed towards the end of the year with a view to selecting one or more drill targets early in the new year with a possible Q2 '08 timeframe for drilling. DualEx has a 31.67% working interest in this 1.25 million acre Block.
The southern Palmyrides area, in which Block XVII resides, has become very active in the past year with a number of large scale facilities projects under way. Three major gas plants with hydrocarbon liquids recovery systems are either under tender or have had EPC agreements concluded that will result in take away capacity on the order of 500 million cubic feet per day with on-stream dates starting in 2010. These facilities are being constructed to process some of the 2.5 - 4 TCF of undeveloped gas discovered to-date in the south Palmyra area immediately north of Block XVII.
Lusitanian Basin, Portugal
DualEx has a 10% working interest in the Torres Vedras and Aljubarrota Concessions (totalling 450,000 acres) in the Lusitanian Basin, onshore western Portugal. The currently proposed exploration program comprises the deepening of two existing wellbores, the recording of two 100-square-kilometer 3D seismic surveys, and the drilling of one deep well to test a subsalt Triassic sand prospect.
Targeted zones for the two re-entries are Jurassic carbonates of the Montejunto formation. The first of the two deepenings, Lapaducos-2, will be deepened from the current total depth of 808 metres to a depth of 1500 metres while the second well, Aljubarrota-4, will be deepened from 2110 metres to approximately 2700 metres.
The location for the subsalt Triassic test will be determined once the 3D survey over that portion of the block has been recorded, processed and interpreted. The second 3D survey will be recorded to follow up on a well drilled by DualEx's predecessor on a reef prospect utilizing older 2D seismic. That well missed the reef although indications from the well data suggest proximity to a reef buildup.