Elkton

ELKTON

The Elkton Project is our other major opportunities in the Peace River are of northern Alberta.

The cores samples taken from the Elkton Erosional Edge are based on a shallow drilling depth of 460 meters of Mississippian-aged, High Porosity, Medium Permeability oil saturated limestone. Which provides a Net Pay of approximately 16 meters. The simple erosional edge geologic model has proven to trap significant heavy oil reserves based upon well log and core data. With over 1050 MMSTB PIIP (third party estimate) of conventional heavy oil (13 – 15 deg API). As for the porosity calculated, the tested core samples ranged from 21% to 30%. The permeability of the Elkton core samples range from 0.001 – 0.34 darcies while the Oil Saturation ranges from 76% to 88% with Oil Gravity resulting in 13.1 to 14.5 (API) at reservoir conditions. Significant oil has been trapped up dip at the Elkton erosional edge where the Elkton Member (and also the Debolt Formation) is unconformable overlain by impermeable Wilrich Member shales (part of the Spirit River Formation) and thin Bluesky sandstones. The Elkton zone abuts up against very thin Bluesky and very thick Wilrich shales, and the same type of feature can be shown for the Debolt. Note the structural change from lower to higher (i.e., “stepping up” from southwest to northeast) occurring in both of the oil-bearing zones. This feature is consistent with an up dip trapping of the oil at Manning on CEC Lands and is likely responsible for the richest, most oil-saturated rocks in the area.

Oil Trapping, Mapping Parameters and Seismic Evaluation

Similar oil pay cutoffs that have been used for the Grosmont heavy oil play were applied to well logs to delineate Elkton (and Debolt) pay. These cutoffs are 18% porosity and 100 ohm-meters resistivity and correlate well for mapping purposes to define the potential Elkton oil pool at Manning. The selected parameter cutoffs are considered to be quite rigorous, indicative of oil productivity rather than just oil in place. Internal reserve calculations based on this map are 800 million barrels PIIP. CEC Deadwood 11-4-92-23W5 The discovery well for the Elkton oil pool at Manning was drilled in March 2013 by CEC. Drilling and coring were completed in five days. The core was sent to AGAT Laboratories for porosity, permeability, oil saturation, and oil viscosity and oil API gravity analysis. This well was the first ever drilled in Manning to test the heavy oil potential of the Elkton erosional edge play, approximately 600 m away from 9-4-92-23W5.

Oil Saturation and Oil Quality

Core analysis indicates that the Elkton has very high oil saturations between 70% and 85%, averaging approximately 78%. Bulk mass oil fractions range between 0.08 and 0.12, which are commonly observed for productive heavy oil reservoirs. The ubiquitous black color in core and the high porosity and resistivity observed in well logs support the abundant oil reported from core analysis. Oil was extracted from core by centrifuge to obtain both viscosity and API oil gravity analysis. The results are considered to be excellent. Analysis of a sample from the Upper Elkton shows a viscosity (at 20 degrees Celsius) of 9,335 centipoise and an API oil gravity of 14.49 degrees. Middle and Lower Elkton oil analyses show viscosities of 13,088 and 19,360 centipoise and API oil gravity of 13.62 and 13.07 degrees respectively. Vertical oil viscosity segregation within the Elkton is not as variable as in the Bluesky oil reservoirs south of Manning. The high API oil gravity and low viscosity also suggest a new and large oil discovery around Manning, particularly on CEC lands. **PIIP estimate combination of Third Party and Corporate Estimates. *** Based on Plan of Development and Feasibility Study.

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