CONVENTIONAL EXPLORATORY DRILLING OPPORTUNITY
LONE PINE CREEK AREA, SOUTH WEST ALBERTA

Double Knot Energy Ltd. holds 100% of the P&NG rights for the Swan Hills formation over 10 sections of Crown land. (Map 1)

The company has completed detailed geologic and geophysical mapping for the purpose of understanding the Southern Alberta distribution of Beaverhill Lake Group, Swan Hills Formation carbonate reservoirs (Figure 3).

FIGURE 3 <click to enlarge>

Table of Formations Lone Pine Creek Area Devonian Targets:
Progressing from early Restricted basin deposits to Open marine

 MAP 3 &lt;click to enlarge&gt; Swan Hills Regional Map with Carbonate Bank Edge THE FEBRUARY 1986 DISCOVERY

MAP 3 <click to enlarge>
Swan Hills Regional Map with Carbonate Bank Edge
THE FEBRUARY 1986 DISCOVERY

Hydrocarbons have been produced from the Swan Hills Formation in Alberta since 1957. Hydrocarbons in some of these reservoirs is trapped in dolomitized reservoirs formed in the up-dip edge of carbonate banks such as Kaybob South and Caroline (Map 3).


The 1986 discovery of the Caroline Swan hills gas pool renewed exploration for oil bearing Swan Hills build ups in the Southern Alberta extension of the Swan Hills trend. Technical work by DKE team included re-examination of well cuttings and well log data combined with a regional geophysical investigation southeast of the Caroline pool in the Lone Pine area of South Central Alberta (Map 4).

 MAP 4 LONE PINE CREEK PROSPECT POROUS REEF STRUCTURE MAP

MAP 4
LONE PINE CREEK PROSPECT POROUS REEF
STRUCTURE MAP

At Lone Pine, Double Knot has identified porous, dolomitic, reefal development along the Southern Alberta Swan Hills carbonate bank edge analogous to the Caroline and Kaybob South Reefs (Maps 4,5). Cross Section A-A’ presented in Figure 5 illustrates the buildup as defined by four key wells in the Lone Pine Area. The prospect is also supported by the interpretation of 100 km of 2D seismic data.


A geological and geophysical investigation conducted with an industry partner has led to the development of a technically strong Swan Hills Reef carbonate bank edge prospect on 100% DKE lands in the Lone Pine Creek Area. Recoverable reserves are estimated at approximately 200 million barrels of light oil. A second Swan Hills prospect was also generated on partner lands that has similar technical characteristics and reserves.

 MAP 5 LONE PINE CREEK PROSPECT STRUCTURAL CROSS SECTION A-A’

MAP 5
LONE PINE CREEK PROSPECT
STRUCTURAL CROSS SECTION A-A’

 FIGURE 5 DOUBLE KNOT ENERGY LTD. LONE PINE CREEK PROSPECT STRUCTURAL CROSS SECTION A-A’

FIGURE 5
DOUBLE KNOT ENERGY LTD. LONE PINE CREEK PROSPECT
STRUCTURAL CROSS SECTION A-A’

DKE Lone Pine Prospect:
Volumetric Reserve Calculation

Depth to Swan Hills: 2800m
Estimated gross thickness Swan Hills Reef: >65m (10% porosity)
D&C cost estimate (vertical): $1.5 million (CAN)
IP (12 months): >1000 BOPD
OOIP: 500 MMBO OOIP
Estimated Recoverable Reserves: 200 MMBO (2.1 MMBO per quarter Section)
RF: 40%

7758 x 10% porosity x 1-15% Sw x 80% shrinkage = 527 bbls oil/acre foot
Total area is 25 sections x 640 acres x 65ft (20m) average pay = 548 MMBO
Total OOIP = 548 MMBO x 50% Rec = 274 MMBO, x 40% Rec = 219 MMBO

Duvernay Potential

The East Shale Basin Duvernay Prospect developed through the course of DKE exploration on the Swan Hills Carbonate Bank. Double Knot Energy Ltd. currently maintains Duvernay rights adjacent to acreage leased at the April 18/18 Crown Land Sale in Twp 30, Rge 26W4M (5 sections for $1.5MM) and acreage about 4 miles Southwest of purchased at the October 11/17 Crown Land Sale in Twp31, Rge 26W4M (3 sections for $2.7MM) (Figure 1)

 FIGURE 1 LAND SCHEDULE

FIGURE 1
LAND SCHEDULE