|Wed Jan 5, 2000|
Update on Garrington Well
| ||The Company is pleased to provide an update from the operator of it's Garrington Well located 60 miles north of Calgary, Alberta. The Garrington, a horizontal well draining a 700 foot plus lateral segment of the Pekisko Dolomite formation has reached a steady production state at the present choke setting. The well is currently producing a total of 60 barrels of oil equivalent per day into the nearby Amoco pipeline. According to the operator, the well could almost double it’s production rate if the company installs it’s own on site compressor to help reduce the 250 p.s.i backpressure in the pipeline that this well is feeding into. The company is presently pricing compressors and evaluating permit requirements for the installation of a compressor at this site.|
With steady production over the last month the water component in the fluids has now drastically reduced to less than 1 barrel per day, which will save the company considerable transportation charges in having this water trucked to a disposal well. Mount Dakota will receive 85% of the cash flow from this well until it has recouped 110% of the costs that it incurred on the well. At that time, the cash flow from the Garrington will be divided equally between Mount Dakota and a private Alberta company. Mount Dakota will be responsible for the provincial royalty due on the products from this well.
On Behalf of the Board
Mount Dakota Energy Corp.
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