CIOC Announces Continued Success of the Company's Liquids-Rich Montney Drilling Program

/NOT FOR DISSEMINATION IN THE UNITED STATES - FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAW/

CALGARY, Sept. 30, 2014 /CNW/ - Canadian International Oil Corp. ("CIOC" or the "Company") is pleased to provide an operational update on the Company's Montney activity.

  • Recent 24-hour Montney test rates of over 3,500 boe/d at Gold Creek and 2,300 boe/d at Karr
  • Notable drilling and completion cost achievements at Gold Creek
  • Acquisition of an additional 25 net sections of highly prospective Montney undeveloped land

CIOC continues an active drilling program in the Gold Creek and Karr areas of West Central Alberta, with three rigs currently running.  The Company is progressively de-risking its extensive land base, with pilot drilling activity transitioning into development.

In the Gold Creek area, CIOC well production rates compete with the best wells in the Montney fairway.  CIOC is currently drilling the Company's first multi-well pad and has proven spacing of six wells per section, with potential for tighter placement.  CIOC is focused on cost discipline, with recent drilling and completion costs of $6.6 mm being achieved at Gold Creek – further enhancing already robust economics.  While encouraged by the capital efficiency achieved, CIOC expects further cost reductions in the future through pad drilling and additional optimization of drilling and completion operations.

Continued Drilling Success

CIOC has followed up the Company's first Gold Creek well (12-36-67-4W6) with seven additional wells drilled in the Gold Creek area.  Three of these wells are producing with three additional wells expected to be on production by year-end.

CIOC's Gold Creek 5-36 well (5-36-67-4W6) had a peak 24-hour average rate of 3,580 boe/d consisting of 1,490 bbl/d of 40 degree API crude oil and 12.5 MMcf/d of natural gas at a flowing pressure of 5.5 MPa (800 psi) on a restricted choke.  This well has recently been tied-in and has achieved a 30 day initial restricted production rate of 1,823 boe/d consisting of 873 bbl/d of oil and 5.7 MMcf/d of natural gas.

In the Karr area, well results are supporting and exceeding the Company's type curve expectations, with five wells currently on production.  CIOC's Karr 4-23 well (4-23-65-3W6) had a peak 24-hour restricted average test rate of 2,300 boe/d consisting of 455 bbl/d of 55 degree API condensate and 11.0 MMcf/d of natural gas at a flowing pressure of 7.1 MPa (1,025 psi) and has recently been tied-in.

Lower Montney Update

CIOC has farmed out a small portion of the Company's lands to test the Lower Montney.  Through this agreement, CIOC has acquired geological data and a horizontal well test in the Lower Montney.

The short lateral test well achieved a peak 24-hour average rate of 400 boe/d of production with over 85% liquids.

CIOC is encouraged by the results of the production test, and plans to acquire geological data from several additional pilot locations prior to year-end with a Lower Montney lateral likely in 2015.  Post earning, CIOC will hold 250,000 net acres of Lower Montney rights in the Deep Basin of Alberta.

Land Acquisitions

Since the beginning of 2014, CIOC has increased its Montney land holdings within the Company's existing core areas by over 25 net sections (16,000 acres), adding approximately 11,000 net acres to the Company's Gold Creek Land position.  CIOC's land holdings in the Montney formation of the Deep Basin of Alberta are approximately 250,000 net acres.

In addition, the Company holds a 100% working interest position in excess of 240,000 acres of Duvernay rights adjacent to highly encouraging industry results in the Kaybob region.

About CIOC

CIOC is a private oil and gas operator with its corporate headquarters in Calgary, Alberta and operations in the Alberta Deep Basin where it is developing multi-zone, liquids-rich oil and gas plays.

Forward Looking Statements

Certain statements contained in this press release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation, including, but not limited to, management's assessment of future plans, operations and strategies, including the focus of the Company's operations, proposed work programs and drilling plans, the potential for tighter placement of wells per section in the Gold Creek area, the anticipated effect of pad drilling and additional efficiencies on the Company's drilling and completion costs, the Company's plans to acquire geological data from additional pilot locations and the anticipated timing thereof, the Company's anticipated holdings of Lower Montney rights in the Deep Basin of Alberta, and other matters related to the foregoing.  Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance or may be identified by reference to a future date. 

With respect to forward-looking statements contained in this press release, the Company has made assumptions regarding, among other things: availability of future acquisition opportunities; future capital expenditure levels; future oil and natural gas prices; future oil and natural gas production levels; future exchange rates and interest rates; ability to obtain equipment and services in a timely manner to carry out development activities; ability to market oil and natural gas successfully to current and new customers; the impact of increasing competition; the ability to obtain financing on acceptable terms; the general stability of the economic and political environments in which the Company operates; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; that the Company will have sufficient cash flow, debt or equity sources or other financial resources required to fund its capital and operating expenditures and requirements as needed; that the Company's conduct and results of operations will be consistent with its expectations; that the Company will have the ability to develop its oil and gas properties in the manner currently contemplated; the estimates of the Company's reserves and contingent resource volumes and the assumptions related thereto (including commodity prices and development costs) are accurate in all material respects; and that the Company will have the ability to add production and reserves through development and exploitation activities. Although the Company believes that the expectations reflected in the forward-looking statements contained in this press release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the foregoing list is not exhaustive of all assumptions which have been considered.

Readers are cautioned not to place undue reliance on forward-looking statements included in this press release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur, which may cause the Company's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the ability of management to execute its business plan; general economic and business conditions; the risks of the oil and natural gas industry, such as operational risks in exploring for, developing and producing crude oil and natural gas and market demand; the possibility that government policies or laws may change or governmental approvals may be delayed or withheld; risks and uncertainties involving geology of oil and natural gas deposits; the Company's ability to enter into or renew leases; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production (including decline rates), costs and expenses; fluctuations in oil and natural gas prices, foreign currency exchange rates and interest rates; health, safety and environmental risks; risks associated with unexpected potential future law suits and regulatory actions against the Company; and uncertainties as to the availability and cost of financing. Readers are cautioned that the foregoing list is not exhaustive of all possible risks and uncertainties.

The forward-looking statements contained in this press release speak only as of the date of this press release. Except as expressly required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Other Information

"Boes" may be misleading, particularly if used in isolation. A Boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (6 Mcf: 1 bbl) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

References in this press release to initial production test rates, initial "flow" rates and "peak" rates are useful in confirming the presence of hydrocarbons, however such rates are not determinative of the rates at which such wells will commence production and decline thereafter and are not indicative of long term performance or of ultimate recovery. Additionally, such rates may also include recovered "load oil" fluids used in well completion stimulation. While encouraging, readers are cautioned not to place reliance on such rates in calculating the aggregate production for CIOC.

CIOC has not conducted a pressure transient analysis or well-test interpretation on the wells referenced in this press release. As such, all data should be considered to be preliminary until such analysis or interpretation has been done.

The following abbreviations used in this press release have the meanings set forth below:

Mcf

thousand cubic feet

MMcf

million cubic feet

MMcf/d

million cubic feet per day

Boe

barrel or barrels of oil equivalent

Boe/d

barrels of oil equivalent per day

bbl

barrel

bbl/d

barrels per day

Mbbl

thousand barrels

Mpa

megapascal

psi

pounds per square inch

SOURCE: Canadian International Oil Corp.

For further information: Scott W. Sobie, President and Chief Executive Officer, Phone: (403) 930-0560, Facsimile: (403)-930-0569


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