OVERVIEW
The Company is a junior natural resource exploration company with its properties in Canada and the Philippines and at the present time does not have a producing natural resource property.
- 1) Altai’s properties in Canada, all in the Quebec Province as following, were maintained in good standing as at September 30, 2008 and to date–
a) the 50% owned Malartic gold property (named "Blackcliff gold property" by property joint-venture partner), Val d’Or of 3 claims of 120 hectares (300 acres),
b) the
63.52% owned as at September 30, 2008 (100% owned as of October 8, 2008 upon the completion of the acquisition of Petro St-Pierre Inc. ("PSP")) Sorel-Trois Rivieres natural gas property, St. Lawrence Lowlands, of 7 oil and gas and reservoir permits of 114,252 hectares (282,317 acres) (excluding the permit of 13,290 Ha (32,840 acres) in which Talisman Energy Canada has 100% working interest and Altai had 8.03% gross royalty as at September 30, 2008 (15% gross royalty post acquisition of PSP), and
c) the 100% owned Sept-Iles gas property, Sept-Iles, of 24,042 hectares (59,408 acres).
In their report dated May 2, 2008 Fraser Mackenzie analysts estimated the recoverable resource potential of Altai gas permits (excluding gross royalty in Talisman permit) at 953 Bcf and unrisked Potential Net Asset Value per share at $44.44.
Altai’s land package is adjacent and central to the properties of Gastem Inc., Questerre Energy Corporation and Junex Inc most of which are optioned either to Forest Oil or Talisman Energy. The underlying prospective Utica Shale extends onto Altai’s property
.
In April and May 2008, the Company has raised a total of $5.853
million consisting of $5.18M from three private placements (including $2M made by Sprott Asset Management Inc. and $0.8M by MMCAP International Inc SPC), $630,000 from exercise of share purchase warrants, and $131,380 from exercise of stock options. These funds significantly boost the Company’s general working capital and enabled Altai to pay for the cash portions totalling $600,000 (cash to former PSP shareholders and payment of PSP’s debts) of the consideration in acquiring Petro St-Pierre Inc. for its minority interest in the Sorel-Trois Rivieres gas property.
Over the next twelve months, the Company’s efforts will remain focused on exploring and developing the Sorel-Trois Rivieres natural gas property In the St. Lawrence Lowlands, which has been significantly enhanced by Forest Oil’s discovery referred to in their press release of April 1, 2008.
OUTLOOK FOR 2008 AND BEYOND
The balance of the proceeds from the flow-through share units private placement made in late 2006 has provided funds for the Company to carry out targeted exploration work on its oil and gas and reservoir permits for the January-February 2008 work program, whereas the proceeds from the common share units private placement made at the same time, together with the cash payments received in 2008 from the option of the Marlatic gold property, increase the general working capital of the Company.
QUOTE
"Over the last two years, Forest has accumulated approximately 269,000 net acres, under lease or farmout, in the St. Lawrence Lowlands in Quebec, Canada. Two vertical pilot wells were drilled in 2007, testing the Utica Shale, to a total depth of approximately 4,800 feet. Production rates tested up to 1 Million cfe/d. Although the play is still in the early stages, Forest believes the initial results are encouraging due to the following factors:
- Shallow depth of the shale
- Rock properties are comparable to other more established shale plays
- High-quality natural gas with minimal impurities
- Infrastructure in place with nearby access to major pipelines
- Premium natural gas pricing to NYMEX makes the economics compelling
Forest plans to drill three horizontal wells in 2008 to refine its drilling and completion techniques………&h... First production is expected in 2009 with the potential for a full scale drilling program in 2010 and beyond."
UNQUOTE
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