Virginia Hills currently holds 179,000 gross undeveloped acres (160,800 net acres) in the greater Red Earth area solely focused on the Slave Point light oil carbonate play. Production is estimated at 1,550 boe/d with a 95% weighting to light oil and NGL’s and a base decline of approximately 20% providing a high netback low decline production base. The Company operates over 90% of its production and the related processing facilities. The Company estimates that on a risked and unrisked basis it currently has a Slave Point horizontal light oil drilling inventory exceeding 50 and 100 net wells, respectively.
Within the Red Earth area the Company currently has approximately 4 section of land that have had waterflood pilots and secondary recovery implemented. The Company estimates that on an unrisked basis it has an additional 20 nets sections of land that can be economically developed using waterfloods based on pilot results to date.
The Company is planning on developing its Slave Point acreage using full cycle economics and concurrently implementing and expanding its waterflood foot prints with its primary drilling program.