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FEG looks for fast bucks from new Canadian purchase

By Phil Boeyen, ShareChat Business News Editor

Friday 7th July 2000

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Fletcher Energy expects a quick payback from a new $33 million investment in Canada.

The company has just finalised a purchase of nearly 125, 000 acres in Saskatchewan as part of a programme to improve the quality of its Canadian portfolio.

It already owns or leases well over a million acres of mineral rights in the Saskatchewan District, and included in the new purchase are five developed areas with a current daily output of around five million cubic feet of gas and 250 barrels of oil.

Just under a third of the new land is undeveloped, and the company plans to drill 12 heavy oil wells in July with the aim of having production on stream in August.

FEG's Canadian president, Mark Taylor, says he is confident the company will get a fast payback from the properties given the current high oil and gas prices.

The properties were bought from the Canadian subsidiary of Union Pacific Resources, which is an independent Texas-based oil and gas exploration company.

Union Pacific announced early in June it had completed the sale of selected non-core Canadian assets and had sold
13 properties to nine different purchasers for a total of US$82 million

UPR's chairman says disposing of the non-core properties will allow it to concentrate more intensely on high-value, growth areas of its Canadian portfolio.

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