A series of unanticipated events and consequences have given rise to a perfect storm for drilling. Commodity prices and highly debt leveraged companies were supposed to create unprecedented fire sale acquisition opportunities. These bargain basement prices have not materialized as a result of the creditors inability to come to grips with the degree of debt/value ratios and the uncertainties associated with the Alberta Government's revamped LLR/LMR legislation. What is certain and quantifiable is the 40% - 50% reduction in drilling and equipping costs of new wells and services over the past 24 months. These reductions, in combination with drastically reduced 3D seismic acquisition costs, have created an ideal scenario to drill for conventional light oil.
How Do We Source Conventional Light Oil? What’s Old is New Again. With few exceptions, the only source of significant conventional light oil reserves reside in the Devonian carbonate systems of Alberta. Conveniently, the noted few exceptions exist in horizons overlaying the Devonian and are easily evaluated as secondary targets while drilling through them. All horizons in High Point's area of focus are proven, high volume light oil producers. These vertically drilled wells require no fracking with risk capital seldom exceeding $450K and successful wells on production for between $800K - $900K. Because of initial production rates ranging from 100 BOPD - 300 BOPD, payout is achieved in months, not years.
High Point Oil Inc. (High Point) was incorporated in April of 2017 and acquired its first oil and gas property in that month. In May and June of 2017 it raised $862 thousand in private equity financing and acquired the majority of its 3D seismic data base. In July it moved into its current office premises and began the process of interpretation of its seismic data and acquiring more land. This process continued through the summer and fall of 2017. High Point raised an additional $662,000 in private equity financing in November and December of 2017 allowing it to continue this process and to acquire more data. On February 12, 2018 it was announced that all of the shares of High Point had been acquired by Bird River Resources Inc. This transaction has provided High Point with the resources to complete its spring drilling program and to initiate a process to incorporate blockchain driven technologies into its activities.