Sacgasco Limited provided its shareholders and the market with an update on the oil development wells in Alberta, Canada. The Taber new drills have been completed with pump, tubing, rods, and surface drivers. The pipelines are currently being trenched and pressure tested.

It is expected the surface piping and coating to be completed and installed shortly. A temporary generator will be installed until the power company can upsize the transformer. The third well, Killam 16344113, drilling rig expected to be on location in approximately two weeks depending on weather.

The drilling program will be funded from the net cashflow resulting from production in Canada. The development wells are: Tabers 162817: Drilled to Produce Proved Undeveloped Reserves; Tabers 12817:Drilled a dual lateral to Probable Undeveloped Reserves; and Killam 16344113: Rig expected on locationTargeting Probable Undeveloped Reserves. The wells are considered independent of each other.

The cost the 3 well development program is estimated at AUD 2.7 million (gross), which will be AUD 560,000 net to Sacgasco. SGC anticipated a gross increase in production of 200 BOPD (gross) which is 40 BOPD net to SGC. Given the current benchmark oil price of around USD 100/bbl, these wells are projected to pay back the capital expenditure in less than 12 months.