Places
Operations
Argosy has a quality asset base in Alberta, Canada. It maintains high working interests and operates all of its properties. Argosy primarily pursues low to medium-risk natural gas prospects with multi-zone potential.
Argosy's business strategy going forward is to create sustainable value through exploitation of its principal properties and expand its asset base through crown land sales, farm-ins and strategic acquisitions. Argosy's current success is due to initiating the development and operating of its land base while maintaining high working interests. Argosy currently has a 100% working interest in 98% of its lands.
Reserves
Total proved plus probable reserves for the Company corrected for the first two quarters of 2009 were estimated to be 3,851 MBOE. Reserves are comprised of 86% natural gas with the remainder being oil and natural gas liquids.
Areas
Claresholm
This area lies 100 kilometers south of Calgary and is Argosy's core area. The term "Claresholm" is used to describe wells, facilities and exploration acreage in the Claresholm, Amelia, Granum and Pearce strike areas.
Argosy has a 93% working interest in 16 (13.6 net) natural gas wells, 3 (net) oil wells, 1 (0.6 net) well awaiting tie-in and 3 (2.6 net) potential natural gas wells. The Company has 18,000 net undeveloped acres, gathering and sales pipelines and a 75% working interest in a natural gas processing facility. The Company has recently negotiated a 13 section farm-in with a major oil and gas company. The lands are adjacent to the company's current land base and include an option to acquire an additional 17 sections.
The Company plans to drill 6 additional wells in the area in the later part of 2009 or early 2010. An additional 38 potential locations have been identified on the Company-owned 47 square kilometers of 3D seismic. The company's operational plans also include further development of the Pearce area oil play using an enhanced recovery process. Initial production of these oil wells is estimated at 25-50 boe/d.
Edson
Argosy has a 100% working interest in 18 sections of land in the Edson area which is located approximately 290 kilometers west of Edmonton and 20 kilometers south of the town of Edson.
Producing wells in this area feature multiple productive zones. Argosy owns 4 sweet natural gas wells, 2 producing and 2 awaiting tie-in. Argosy has identified 11 horizontal locations on its 5760 acres of net undeveloped lands, but since further development of this area will require a significant capital commitment, Argosy has postponed their drilling activity until such time as commodity prices and/or capital markets improve.
Saxon
The Saxon area is located 125 kilometers southwest of Grand Prairie, Alberta. It is in the early stages of geological development and is more readily accessible in the winter months.
Argosy has 100% working interest in 24 sections of land, 1 (net) producing natural gas well and 15,840 net undeveloped acres. The Company also owns 36 square miles of 3D seismic and 20 kilometres of 2D seismic over the lands.
Argosy has identified 11 multi-zone locations in the area, including a Montney play. It is estimated that the multi-zone locations will cost approximately $1.5 million per well with the potential to add reserves of 160,000-350,000 boe per well. The Montney play could consist of horizontal wells estimated at $4.0 million per well and potential reserves of 2 - 4 bcf per well. The Company anticipates initiating drilling activity in the 2009/2010 drilling season depending on improvements in commodity prices and capital markets.