A pumpjack pumps oil around
the clock in Alberta.

Brinco Oil & Gas Limited

Operations

During 1981 Brinco Oil & Gas Limited
participated in a total of 54 wells resulting
in 10 oil wells and 28 gas wells. Major areas
of drilling activity were eastcentral Alberta
and northeastern British Columbia. Drilling
expenditures in 1981 totalled $6.4 million
including $4.1 million from the Brinco ‘81
Energy Program.

Oil production averaged 333 barrels per
day. The major production areas being the
Joffre, Lobstick and Chigwell areas in
Alberta and the McAden property in Texas.
Consistent with last year, approximately
10% of oil production was from United
States properties. Reduced production from
1980 resulted from normal declines in
producing properties which was only
partially offset by production from new
wells completed in 1981.

Natural gas production averaged 1,910
MCF per day. Major gas producing areas
included northeastern British Columbia and
several areas in central Alberta. Weak
demand continued to be a major factor in
poor sales levels.

Brinco’s oil and gas reserves have been
estimated by an independent consulting
engineering firm as of mid-1981. The
estimated net present value, of both proved
and probable reserves have increased
slightly from the December 1980 estimates.
However, poor operating results and a more
conservative interpretation in a few major
properties have reduced reserves of oil
while gas reserves remain approximately
the same.

Drilling Results 1981 1980
Success Rate 70% 65%
Total Wells Drilled 54 57
Crude Oil 10 19
Natural Gas 28 18
Production

(average daily) 1981 1980
Crude oil (barrels) 333 391
Natural Gas (MCF) 1,910 2,667

18

Company Share of Reserves
(after deducting royalties) July 1, December 31,

1981 1980
Crude Oil (barrels) 2,877,000 4,409,000
Natural Gas (BCF) 32.7 33.5

Exploration and Development

Brinco was the operator in a significant
oil success in Mitsue, Alberta (12.5% Brinco
interest) and a gas success in Cabin, British
Columbia (48.6% Brinco interest). The
Mitsue oil well was tested at 1,500 barrels
per day but production is restricted by
government regulation to approximately 35
barrels per day. It is anticipated that these
restrictions will be relaxed in the second
half of 1982. The Cabin gas well tested at
approximately 3,000 MCF per day and
could be on stream as early as the winter
of 1982/83. A partner operated well at
Pembina (Lobstick) in central Alberta
(18.75% Brinco interest) tested 2,300 MCF
per day. The well is shut in waiting for a
market for the gas.

In addition, the company participated in
the further development of prospects in
Kansas, Nebraska and Texas. Five wells
were drilled, four of which were cased for
oil production.

The Brinco ‘81 Energy Program was
established in 1981 to finance high risk
exploratory drilling on prospects with high
reserve potential. Brinco is the General
Partner of the Limited Partnership. Sale of
units in the Program raised $8.2 million to
be spent on drilling ten exploratory
prospects, all located in the northeastern
British Columbia/northwestern Alberta
areas. Six wells were drilled and one
partially drilled in 1981. The program has
resulted in one successful gas well at Cabin
mentioned above (30% Energy Program
interest), two potential gas wells at Border
and Tenaka (24% and 26.7% respectively
Energy Program interest) and three dry
holes. Drilling of the remaining wells in the
program will be completed by April 1982.

Brinco reviewed a number of exploration
proposals located on Federal lands primarily
in the Beaufort and East Coast regions