BIRCHCLIFF'S RESOURCE PLAYS IN THE PEACE RIVER ARCH

Birchcliff is focused on two established resource plays within the Peace River Arch, the Montney/Doig Natural Gas Resource Play and the Worsley Charlie Lake Light Oil Resource Play. Our technical teams are also analyzing and evaluating new resource plays on which virtually all of our undeveloped land has potential.

Birchcliff characterizes its resource plays as plays that have regionally pervasive, continuous, low permeability hydrocarbon accumulations or systems that usually require intensive stimulation to produce. The production characteristics of these plays include steep initial declines that rapidly trend to much lower decline rates, yielding long life production and reserves. Resource plays exhibit a statistical distribution of estimated ultimate recoveries and therefore provide a repeatable distribution of drilling opportunities. As more wells are drilled into a resource play, there is a substantial decrease in both the geological and technical risks.

MONTNEY/DOIG NATURAL GAS RESOURCE PLAY

The Montney/Doig Natural Gas Resource Play is classified by Birchcliff as a hybrid resource play because it is comprised of approximately 300 metres (1,000 feet) of gas saturated rock with both tight silt and sand reservoir rock interlayered with shale gas source rock.

Horizontal wells on the Montney/Doig Natural Gas Resource Play that utilize multi-stage fracture stimulation technology are drilled to a measured depth of 4,000 to 5,000 metres and deliver initial productivity rates of 2,000 to 8,000 Mcf per day (333 to 1,333 boe per day).

Drilling activities during 2013 on the Montney/Doig Natural Gas Resource Play included 26 (26.0 net) wells, consisting of 25 (25.0 net) horizontal natural gas wells and 1 (1.0 net) vertical exploration well, all of which utilized the latest advancements in multi-stage fracture stimulation technology.

To date, Birchcliff has focused its efforts on drilling wells in two stratigraphic intervals: the Basal Doig/Upper Montney and the Lower/Middle Montney. There are four other stratigraphic layers that industry has been exploring proximal to Birchcliff land, which provides potential to significantly increase Birchcliff's opportunity portfolio.

Well spacing is an important consideration for the Montney/Doig Natural Gas Resource Play. While industry competitors in the Peace River Arch area have drilled up to eight horizontal wells per section, per stratigraphic zone, using 80 acre spacing units, reserve assignments to Birchcliff's lands in the Montney/Doig Natural Gas Resource Play by Deloitte LLP, our independent reserves evaluators, are currently based on four wells per section, per stratigraphic zone. Birchcliff's technological analysis supports reducing inter-well spacing and in the future, the Corporation expects Deloitte to assign additional future horizontal locations and reserves based on reduced inter-well spacing.

WORSLEY CHARLIE LAKE LIGHT OIL RESOURCE PLAY

Successful expansion of the Worsley Charlie Lake oil pool, waterflood performance and the application of horizontal drilling and multi-stage fracture stimulation technology have all contributed to its continued production and reserve growth and high netbacks.

Horizontal wells on the Worsley Charlie Lake Light Oil Resource Play that utilize multi-stage fracture stimulation technology are drilled to a measured depth of 2,500 to 3,500 metres and deliver initial productivity rates of 60 to 400 boe per day.

 

 

 

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