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Tepee Butte Prospect, Hettinger County, North Dakota
| Location: |
Section 24, T133N R97W, Hettinger County, North Dakota |
| Acreage: |
480 gross acres |
| Working Interest: |
Option to earn an 82.5% working interest in the Prospect |
| Operator: |
GPE Energy Inc. |
On September 8, 2008 the Company reported that its US subsidiary, GPE Energy Inc. ("GPEI"), entered into an Exploration and Development Agreement with RTR Energy, LLC of Lone Tree, Colorado ("RTR") to farm-in for a working interest of 82.5% in the redevelopment of the Tepee Butte oil field in Hettinger County, North Dakota.
Under the terms of the Agreement, GPEI has agreed to pay 100% of the cost of the 3D seismic survey which is estimated to cost US$300,000. GPEI is managing the acquisition, processing and interpretation of the seismic, expected to be completed during Q3-2008. GPEI then has the option to earn an 82.5% working interest in the Tepee Butte Prospect by paying 100% of the cost of one development well. Thereafter, the cost of all subsequent operations will be borne and paid on the Working Interest basis of: RTR at 17.5%; GPEI at 82.5%.
Tepee Butte is a one-well oil field located in Hettinger County, North Dakota, discovered by Amoco in 1980. The Urlacher #1-24 well produced 227,000 barrels of 40° API oil, 309,000 MCF of gas, and 1,662,000 barrels of water from the C and D zones of the Ordovician Red River Formation at a depth of approximately 10,000 feet. The high water production was attributed to a poor initial cement job and the Urlacher well was abandoned in 2002. Evaluation of existing 2D seismic lines indicates 160 or more acres of structural closure at the Red River horizon which could contain substantial undeveloped oil resources. GPEI has conducted a 4.9 square mile 3D seismic survey to evaluate the potential for remaining undeveloped oil resources and drilling of a development well.
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