Bayhorse Silver Inc. BHS: TSX-V (the “Company” or “Bayhorse“) is pleased to report that Saturn Minerals Inc (“Saturn”) has announced that it has received a proposal from its Bannock Creek Property Joint Venture Partner (“JV Partner”) in Saskatchewan’s northern Williston Basin (Petroleum Exploration Permit 72) for a 4 well drilling program, commencing July 2015.
This is positive news for Bayhorse, which is farming-in with Saturn on the adjacent 400 square mile Little Swan light oil and gas prospect, as a successful oil well at Bannock Creek should positively affect Bayhorse’ share price.
The first proposed well is to re-drill the 9-5 Bannock Creek Exploration Well location as reported in Saturn’s news release of May 19, 2015), with additional wells to follow.
Saturn’s JV Partner has stated that it has arranged a funding facility for the initial 4 well program. Saturn’s CEO Stan Szary stated “This is very encouraging for us in that we now appear to have a viable JV Partner with funding in place that can significantly de-risk the financing of the play. A multiple well exploration program further de-risks the play”. “With the seismic data acquired to date and the information from the initial 9-5 Bannock Creek Exploration Well, we look forward to the next stage of exploration at Bannock Creek”.
Saturn states that the exploration oil well program has been proposed by the JV Partner following the recently completed 2D seismic program, which was designed to identify and confirm closure for potential light oil traps in the stacked Red River, Winnipeg and Deadwood Formations of the Northeastern Williston Basin. The exploration wells will be drilled and completed conventionally to a depth of less than 1,000 meters. The JV Partner has surveyed a total of 10 locations and has an option with its drilling contractor to drill an additional 6 wells at Bannock Creek.
Saturn’s JV Partner estimates initial production rates of a successful well could be ranging between 100 to 150 barrels per day per well and estimated total netback of approximately $35 CAD per barrel at the current oil price level.
The proposed wells are estimated to cost approximately $830,000 CAD per well to drill, tie in and complete. Based on a 50% interest the costs for Saturn would be approximately $415,000 CAD per well.