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MidTex Natural Gas, Texas USA

Highlights

Canuc has low risk, long life natural gas wells in West Texas, USA.

  • Cash flow from low risk natural gas production in West Texas, USA
  • 8 wells currently producing
  • Gas pipeline runs through the property
  • Producing wells provide steady cash flow
  • 2000-hectare Thomson lease, 320-hectare Coody Morales lease
  • Both fields have room to support more wells
  • All wells have multiple potentially productive horizons up-well & behind pipe
  • Multiple further hydrocarbon zones behind pipe which can be produced later
  • Long life and multiple year revenue projections with low decline rates

In July 2011 Canuc completed the acquisition of Midtex, Oil & Gas Corporation, a private Ontario corporation that held a 100% working interest in a gas well located on the Coody Morales lease in Stephens County, Texas.

The Coody Morales lease can accommodate an additional 3 to 4 wells, which may intersect 2 or 3 known productive gas horizons. The lease benefits from a gas pipeline which bisects the property making the gas immediately saleable. A second producing gas well was completed in late August 2011.

The Midtex project was expanded in 2012 to include a 20% working interest in the 2,000-acre Thompson lease also located in Stephens County, Texas.

2000-acre Thompson lease, multiple horizons & further infield potential

The first Thompson natural gas well (Thompson 40) was drilled in 2012. In February 2013 a second well (Thompson 40 #2) intersected the same reservoir as the initial well. A third well (Thompson “A”) was drilled in March 2013 and in July 2013 a fourth well (Thompson “B”) was successfully completed. In February 2014 a fifth well (Thompson 40 #5) was drilled, and it was also successful. Drilling was initiated on the sixth well (Thompson C) in June 2014. On February 14, 2018 the Company announced plans for drilling another natural gas well on the Thompson lease in Stevens County, West Texas.

Wells drilled on the Thompson lease have identified 3 productive horizons. Decline rates for natural gas production in the lowest and first productive horizon have proven to be slow which suggests a robust natural gas endowment and a long field life. Above the lowest horizon (Iona Hickey Conglomerate) there are 2 further productive horizons. The first of these 2 further horizons is the Caddo Limestone, which is a well-known oil producer in the area. Further ‘up pipe’ is the Strawn Sand which is a gas zone. Both the Caddo Limestone oil zone and the Strawn Sand natural gas zones can be produced pursuant to decline of natural gas production from the lower Iona Hickey Conglomerate.

The producing wells on the Thompson lease are connected to a short collector line which ties into a major natural gas line a few miles distance. This line supplies consumers local to Steven’s County and ensures a higher net gas price as a result of low transportation costs.

Room for the addition of new natural gas wells on the Company’s leases, and the detection of multiple potentially productive horizons behind pipe in existing wells suggests that the Company may have long life cash flow potential in West Texas.

Cash flow from natural gas production is applied against corporate operating costs, and positions Canuc to minimize unnecessary shareholder dilution.

 


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