DBRM

 

 

 

 

 

 

 

The East Slopes Project

This page updated 06/14/2010

Daybreak owns a 25% working interest in approximately 23,000 acres at the East Slopes Project.  We have identified a number of exploration prospects yet to be drilled, as well as developing recent discoveries already made.  We are targeting the Vedder sands down to 3,000 feet in the northern portion of our acreage position; and the Santa Margarita,  Etchegoin, and Olcese sands down to 2,000 feet in the southern portion of our acreage position.  We have 3-D seismic over our entire acreage position.  This is the first seismic ever shot in this particular area.

 

Sunday Location

In November, 2008 we made our initial oil discovery drilling the Sunday# 1 Well.  The well was put on production in January 2009.  Production is from the Vedder sand at 2,000 feet.  During 2009 we drilled three development wells including one horizontal well.  We are currently producing 85 barrels of oil per day (20 barrels of oil per day net to Daybreak).  The Sunday reservoir is now fully developed and we have no plans to drill any future wells in this reservoir.

Daybreak owns a 25% working interest with a 16.5% net revenue interest in the Sunday #1 Well and a 37.5% working interest with a 27% net revenue interest in the remaining Sunday wells.

 

Bear Location

In February 2009 we made our second oil discovery drilling the Bear #1 Well, which is approximately one mile northwest of our Sunday discovery.  The well was put on production during May 2009.  Production is from the Vedder sand at 2,200 feet.  In December 2009, we began a development program, and by May 2010, we had drilled three development wells with plans to drill at least two more wells by the end of 2010.  We are currently producing 65 barrels of oil per day (12 barrels of oil per day net to Daybreak).

Daybreak owns a 25% working interest with a 16% net revenue interest at the Bear location.

 

Black Location

The Black property was acquired through a farm-in arrangement with a local operator.  The Black location is just south of the Bear location on the same fault system.  During January 2010 we drilled the Black #1 Well.  The well was completed and put on production in January 2010.  Production is from the Vedder sand at 2,150 ft. Initial results from the production indicate that the reservoir is small. We are currently producing 15 barrels of oil per day (5 barrels of oil per day net to Daybreak) we will monitor the well performance and evaluate it before making any decisions to drill any future wells.

Daybreak owns a 37.5% working interest and a 29.8% net revenue interest at this location.

 

Sunday Central Processing and Storage Facility

The oil produced from our acreage is considered heavy oil. The oil ranges from 13° to 15° API gravity.  All of the oil from the Sunday, Bear and Black locations is processed, stored and sold from this facility.  The oil must be heated to separate and remove the water to prepare it to be sold.  We constructed these facilities during the summer and fall of 2009 and at the same time established electrical service for our field by constructing three miles of power lines.  By having this central facility and permanent electrical power, it ensures that our operating expenses are kept to a minimum.

 

Dyer Creek Prospect

This is a Vedder sand prospect located to the north of the Bear reservoir on the same trapping fault.  Several wells have been drilled at this prospect with oil pay or shows in the Vedder.  Several of the wells drilled in the 1960’s sanded up on test.  We plan to twin a well that had 20 feet of oil pay that was never properly tested due to the perforations being in the wrong spot due to measurement problems during the completion.  We have surveyed in all the wells in the prospect area which proved the perforations were 16ft below the sand. There are abandoned production facilities on the lease that we feel can be utilized, but some repairs will need to be made and electrical lines will have to be extended from the Bear location. 

Daybreak owns a 37.5% working interest in at the Dyer Creek Prospect.

 

Ball Prospect

This is a Vedder sand prospect separated by a fault from the Dyer Creek Prospect.  The well will be located near a well that had oil pay in the Vedder Sand, but was abandoned.  3-D seismic indicates that the well will be in a better structure position than the abandoned well and it will have approximately 40 acres of closure, similar to the Bear location.  If successful, the Ball wells will be able to utilize the Dyer Creek production facility.  

Daybreak has a 25% working interest in Ball Prospect.

 

Southern Prospects

We have five  prospects in the southern portion of our acreage position in the East Slopes Project.  These prospects are targeting the shallow  Santa Margiriata , Etchegoin and Olcese Sands down to 2,000 feet.  Several of the prospects have had wells drilled on them in the past that indicated oil reservoirs but were abandoned due to sand influx.  Our modern completion techniques have eliminated sand influx .

Other prospects on our acreage are in various stages of evaluation and will be candidates for the future drilling program.