In This Section



  • 100 sections of land, 38.5% working interest held by Strategic
  • Infrastructure in place
  • BC has a royalty friendly and an attractive fiscal regime with incentives for exploring and developing infrastructure
  • Horizontal drilling with multi-frac technology has large upside for oil recovery
  • Two wells drilled and completed March 2010
  • A long tenure on the lands, with only minor land expiries before 2013
  • Rights to extensive 2D seismic coverage of the area
  • 2011 Development plan includes the construction of the temporary battery at A18J (Feb 2011), all season road access into A18J and A19J (June 2011) and the drilling of up to 4 horizontal multi frac wells commencing in the 3rd Qtr 2011.

Reserves Evaluation

Commissioned GLJ Petroleum Consultants Ltd to undertake resource evaluation of Corporation's Maxhamish area effective December 31 2010.

GLJ assigned DPIIP1 to 13,874 gross acres (22 sections gross lease) for best estimate of 123 MMbbl oil (48 MMbbl net to Strategic). This represents 6 MMbbl of oil per section gross lease.

GLJ DPIIP study is restricted to a 3 mile extension from existing wells where proven and probable assignment of reserves have been recognized and represents only 20% of Strategic's Maxhamish land base.

Results strengthen Strategic's internal estimate of over 500 MMbbl of oil for the entire Maxhamish lease.


  • Construction of a 10km all-season road to access existing A18J pad from Liard highway now completed.
  • Construction of new rock-base pad at A19J that will enable 8 horizontal wells to be drilled.
  • Licensing for 3 horizontal multi-frac wells to be drilled starting June 2011.
  • Tie-in of existing A49J horizontal to A18J horizontal pad to be completed by June 2011
  • Temporary Stock Tank battery construction at A18J to handle oil from the two producing pads and the future pad at A19J. This will enable trucking of oil to the Taylor Terminal in Fort Saint John until the Permanent Battery is built.  
  • Planned construction of Permanent Battery near Liard highway for the 2012 winter season.


In February 2009, Strategic entered into a Farmout Agreement with EnCana in the Maxhamish region of northeast British Columbia. The Agreement provided Strategic access to over 50,000 acres of highly prospective acreage in the Liard Basin, 125 km north of Fort Nelson, an area with significant hydrocarbon production.

In November 2009, Strategic also entered into a participation agreement with a prominent Calgary based company who became a partner with Strategic in the Maxhamish Farmout Agreement. Strategic raised equity in December 2009 and October 2010, of $14.5 million and $22.5 million to ensure that they can fund an aggressive drilling program to prove up the tight oil play.

The initial terms of the Farmout provided that after payout and earnings, Strategic would own a 25% working interest in the lands; its partner would own 40% and EnCana would maintain a 35% interest.

The primary zone that Strategic and its partner planned to focus its effort on is the Chinkeh Sand. The operator planned to use horizontal multi-stage fracturing in an attempt to determine the economic and geologic feasibility of a potential development.

By mid-March 2010 two wells were drilled, completed and then fracture stimulated using multi-stage fracs. Both the new wells were production tested and placed on production with pump-jacks and tied-in to a natural gas gathering and processing facility. Combined deliverability from these wells is restricted by the owner of the natural gas facility. Based on field performance and internal engineering evaluations, Strategic estimates that Maxhamish wells have a productive capacity in the range of 200 to 250 barrels per day with a targeted recovery of 150 to 225 MB of proved plus probable reserves (42° API oil) under primary production.

In May and June 2010 Strategic and its partner, added approximately 19 additional sections of highly prospective lands for the Chinkeh Sand immediately to the west of the lands included in the Farmout Agreement. With the lands included by the Farmout Agreement and the direct interest lands just acquired, over 100 sections of land are now available for drilling.

On October 1, 2010 Strategic and its Patner acquired Encana's 35% working interest for $13 million (50% shares - $5 million). This effectively eliminates the Farmout Agreement.

    The benefits are:

  • Immediate increase of working interest to 38.5% on the >100 gross sections of land
  • Development plan is no longer subject to the commitment plan in the Farmout Agreement, including 18 remaining commitment wells
  • Removal of the "promote" on wells or facilities which improves economics substantially.
  • Removal of uncertainty on whether the Farmor was committeed to spending capital to develop this property

As of October 2010, as a result of the acquisition from Encana, Strategic has now simpified its interests at Maxhamish. The Company now holds direct interest of 38.5% in all the greater than 100 sections of land at Maxhamish.



1.  DPIIP definition and disclosure

Maxhamish Steen River Ferrier Harmattan Taber Conrad