Strata Oil & Gas Inc. ("Strata") (OTC BB: SOIGF), is pleased to announce the release of its Resource Reclassification Report on its 100% owned Cadotte Project in the Peace River Oil Sands area of Alberta, Canada.
Norwest Corporation ("Norwest") of Calgary Alberta completed this independently prepared Resource Reclassification Report ("Report") on behalf of Strata. In the report, Norwest concludes that historical pilot testing in the region combined with field testing and ore characterization work that Strata has completed at Cadotte to date, is sufficient to allow Norwest to construct a computer simulation of a pilot design for the testing of Debolt bitumen producibility at Cadotte. It is also sufficient to demonstrate the existence of a carbonate pilot, not previously available, needed for the classification of the recoverable resource estimate for that area as "Contingent".
"This upgrade in resource classification solidifies Strata's position as an industry leader in the carbonates. Our newly classified Contingent Resource asset has greatly enhanced shareholder value, bringing our 56,000 barrels per day commercial plan a major step forward to fruition."
"Our attention in the coming months is to forge ahead with securing financing for our production testing phase, and to focus the company's manpower and resources on bringing the Cadotte project to Reserve status," said Mr. Daems.
The report prepared by Norwest is compliant with the requirements of National Instrument 51-101 with respect to classifying the resource as Contingent Resource. Mr. Geoff Jordan, P. Geol., Senior Geologist of Norwest Corporation and a qualified person as defined by National Instrument 51-101 is responsible for the preparation of the technical information in the report.
Table 6.2 from the report (shown below) indicates the new classification.
The report contains a literature review conducted on data and publications concerning pilot projects carried out in the carbonate of the Grosmont Formation, to better understand the potential behavior of similar carbonate in the Debolt Formation in the Cadotte area. It was found that:
- The fluid and rock properties are very similar in both the Grosmont and the Debolt Formations, with a tendency to be more desirable in the Debolt because of the somewhat higher reservoir pressure temperature;
- The numerous thermal projects conducted in the Grosmont Formation have had mixed results with surprisingly high production in some of them, especially when using the Cyclic Steam Stimulation recovery method. This technique is considered very promising for application on the Strata Cadotte Project;
- Both the Grosmont and Debolt Formations are reported to have "heterogeneous" characteristics that provide high lateral permeability inside ore zones with very high oil saturation;
- Laboratory tests show high recovery factors with thermal processes, but other methods are also being extensively tested. The most promising appear to be those using solvents. Sonic systems are also being considered;
- Reservoir simulation seems to confirm the channeling character of the rock in terms of steam and combustion gas behaviour;
- Current bitumen recovery testing and development activity from carbonate is growing as oil prices make these reservoir types and fluids more economic; and
- Alternative sources for thermal energy generation are also being considered to exploit carbonate reservoirs, as water consumption costs and carbon dioxide disposal costs may rise significantly in the future.
Contingent Resources are defined as those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets.
Strata Oil & Gas Inc. is a Canadian junior exploration company focused on carbonate-hosted bitumen deposits in the Peace River area of Alberta, Canada.
Strata Oil & Gas is a trademark of Strata Oil & Gas Inc. This announcement contains forward-looking statements which involve risks and uncertainties that include, among others, limited operating history, risks related to petroleum exploration, limited access to operating capital, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All statements made herein concerning the foregoing are qualified in their entirety by reference to the Pre-Feasibility Study which has been filed with the SEC. More information is included in Strata's filings with the Securities and Exchange Commission which may be accessed through the SEC's web site at www.sec.gov.