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year-round flow. As the field begins to deplete, we capture more gas than our competitors, and in a field like this, with competitors drilling nearby, it becomes an issue. So we’re proud of having put it all together.” Operating costs are kept as low as possible, and a small company owning its infrastructure has strategic aspects. Ironhorse ships its Shackleton gas into a major sales line, TransGas, which runs just south of its property. “Since we own our processing, which is a major cost for a gas company, we retain that 25- 28 percent return usually built into the cost of construction. We can also control costs by compartmentalizing—our gas plant is situated in an area that can hold six compressors; we currently have two, we’re adding a third this winter, and the operation can scale up as needed, without having to pay up-front for complete construction. These elements, based on a strategy of cost minimization, allow us to weather volatile revenue periods that are influenced by the price of natural gas.” In the spring of 2005, Ironhorse acquired the “Overall we’re developing a critical mass that we think is necessary for excellent return on investment, our ultimate goal” 50 www.bus-ex.com January 08

with gas in Shackleton due to ready access. Oil has recently seen a run-up commoditywise, and it’s expected to maintain or slightly increase, especially with overseas demand. “So we think oil has good promise, but we focus on return on investment. We’ve been looking at Pembina since 2004 and it’ll be 2008 before we get into it. That lead time allows us to learn from competitors in the area. “Mishow was discovered in 2006. Seismic surveys indicated promise there, and when a nearby competitor had drilling success, it provided us with information and impetus to evaluate our own property more closely. Pembina could produce 1,000 barrels daily for Ironhorse, doubling our current production. Overall we’re developing a critical mass that we think is necessary for excellent return on investment, our ultimate goal.” January 08 www.bus-ex.com 51 signifi cant and undeveloped oil fi eld acreage at Pembina, west of Edmonton. The Pembina Nisku fi eld is a fairway that runs from the southwest to the northeast over four townships, and the company has land in three concentrated areas, the largest near Violet Grove and Mishow Creek. “Our fi rst focus is on Mishow,” he says. “We’re looking at two wells, offsetting a discovery, all based on 3-D seismic surveys. We think we have a look-alike to the well discovered by a competitor, which had 65 feet of oil pay and will likely yield up to 1.8 million barrels just from one well. We’re looking to capture similar sizes; in the area we’ve identifi ed six locations, and if successful we’ll continue to see more wells. It’s not risk free, but the resource and return on investment is impressive enough.” In the long term Ironhorse is looking for a balance of oil and gas discoveries, but began IronhorseOil&Gas