Digital Ecosystems Provides Operations Update on Piceance Basin Projects
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DENVER, June 12 /PRNewswire-FirstCall/ -- Digital Ecosystems Corp. (Nachrichten) (BULLETIN BOARD: DGEO), through GSL Energy, its 85%-owned operating subsidiary, today provided an operations update for its drilling activities in the Piceance Basin.
GSL Energy has commenced a 25 well drilling program on one of its natural gas prospects in the Piceance Basin, a prospect the company describes as Piceance II.
Piceance II Project
Piceance II is one of GSL Energy's natural gas prospects in Colorado's Piceance Basin. The prospect, consisting of over 1,000 net mineral acres, is adjacent to the Grand Valley Field, targeting the Williams Fork sandstones, a well-known gas producing formation throughout the basin.
GSL Energy and EnCana have agreed upon a nine well program for GSL's Jolly leasehold on the Piceance II prospect. GSL Energy has an approximate 25% working interest in the Jolly leasehold. The first well has been successfully drilled, production casing has been set, and the well is awaiting a completion rig. Two drilling pads are being prepared in which eight additional wells will be drilled beginning in June 2006.
GSL also is negotiating an operating agreement with a third party to drill 15 wells on the Furr and Reppo leaseholds on the Piceance II prospect. GSL currently has an approximate 22.5% working interest in the Furr leasehold and an approximate 31.25% interest in the Reppo leasehold. It is anticipated that these working interests will be reduced upon entering into this operating agreement.
With respect to all exploration and drilling activities in Piceance II, GSL Energy is obligated to pay the first $25 million of costs incurred on the prospect by another working interest owner.
GSL Energy has also contracted with a third party to drill one well by the end of 2006 on its acreage in the South Bronco prospect, a gas prospect located in the southern part of the Piceance Basin in which it has an approximate 50% working interest. The other party has the right to drill two additional wells on the South Bronco prospect if it so desires. With respect to all exploration, drilling and development activities in the South Bronco prospect, GSL Energy is obligated to pay the first $25 million of costs incurred on the prospect by another working interest owner.
Kelly H. Nelson, Chief Executive Officer, stated, "We are pleased to announce that the company is ahead of its Piceance Basin drilling program schedule. The company closed May 10, 2006 a $1.00 per share equity private placement, totaling approximately $33 million. This equity financing will help us to continue with our aggressive drilling program in the Piceance Basin and to commence development activities on other prospects."
To facilitate ongoing drilling, GSL Energy has contracted one rig with EnCana, a second rig with Bronco Drilling Co., and is currently negotiating for a third rig.