CALGARY, Jan. 18, 2012 /CNW Telbec/ - Exall Energy Corporation ("Exall"
or the "Company") (TSX: EE) is pleased to announce the test production
flow rates on the successful new discovery drilled on a 3D seismic
channel anomaly in its Marten Mountan, Mitsue operating area.
Additionally, Exall is pleased to provide a fourth quarter 2011
operational update. Exall's public filings can all be found at www.exall.com or www.sedar.com.
Exall's recently drilled new Gilwood A Sand discovery well tested
swabbing 777 BOEPD (net 513 BOEPD) of 40.8° API sweet oil with a small
amount of solution gas
Participated in the drilling of 5.0 gross (3.55 net wells) during the
fourth quarter of 2011, a fifth well (0.66 net) was spud just prior to
the Christmas break
Current production is 1,900 BOEPD net
Production equipment shortages and low reservoir pressure issues
provided material operational challenges during the later half of
December, preventing Exall from reaching its year end targets; December
31, 2011 production was approximately 1,602 BOEPD
Exall has submitted an amendement to its South Marten Mountain
waterflood scheme to the Energy Resource Conservation Board (the
3D Seismic Gilwood "A" Well Test
The new Gilwood A Sand discovery well drilled on an interpreted
channel-type anomaly identified on the 2011 3D seimic program is
undergoing completion operations. The well is currently swab testing
777 BOEPD (net 513 BOEPD) of 40.8° API sweet oil with a small amount of
solution gas and a high fluid level with very little drawdown.
The well is located over four kilometers northwest of the nearest
Gilwood production on a portion of the 189,480 gross acres (75,792
gross hectares) and 138,040 net acres (55,216 net hectares) of
undeveloped land the Company holds in the Greater Mitsue area. The
second Gilwood channel test well has spud and is drilling.
During the fourth quarter of 2011, Exall participated in the drilling of
5.0 gross (3.55 net wells). Of the five wells drilled during the fourth
quarter of 2011, one has been completed and tied in.
A sixth well (0.72 net) was spud just prior to the Christmas break and
is currently drilling ahead.
Production equipment shortages and low reservoir pressure issues
provided material operational challenges during the later half of the
December time, frame preventing Exall from reaching its year end
targets. December 31, 2011 production was 1,602 BOEPD.
Low reservoir pressure in the eastern extent of the South Marten
Mountain waterflood project resulted in reduced production from four
wells. Application has been submitted for an amended water flood scheme
which includes the addition of three producing wells to the scheme and
conversion of one well to water injection. Production from these wells
will remain impacted until Exall receives approval of the amendment
from the ERCB and can initiate pressure maintenance.
During calendar 2012 Exall intends to drill 18 to 24 wells, driving a
capital budget of approximately $45.0 million to $65.0 million,
including the $12.5 million 244 square kilometer 3D Seismic program in
the first quarter.
Exall anticipates that this program will add approximately 800 BOEPD to
1,000 BOEPD, resulting an an annual production average of 1,750 BOEPD
to 2,500 BOEPD depending on operational timing. Exall's current target
exit rate for 2012 is 3,000 BOEPD.
Exall anticipates that this program will drive a cash flow from
operations of approximately $30.0 million to $40.0 million. This cash
flow forecast is based upon realizing an average of $90.33 Cdn for
Exall's oil and $4.01 for its gas. Royalties are expected to be in the
range of 25.4% or $21.60 Cdn while operating costs are anticipated to
remain in the $9.00 per boe range giving Exall an anticipated Field
Netback of $62.31 for fiscal 2012.
Sale of Texas Gas Properties
Exall has entered into a letter agreement with a private American
company to sell all of its interest in the Harris and Layton, Texas
properties held by the Company. Closing of the sale is scheduled for
January 31, 2012. The properties currently produce approximately 40
MCFPD of gas and associated liquids net to Exall.
Exall is a junior oil and gas company active in its business of oil and
gas exploration, development and production from its properties in
Alberta. Exall Energy is currently developing the new Mitsue area
Marten Mountain discovery in north-central Alberta.
Exall Energy currently has 62,263,854 common shares outstanding. The
Company's common shares are listed on the Toronto Stock Exchange under
the trading symbol EE.
This news release contains forward-looking statements, which are subject
to certain risks, uncertainties and assumptions, including those
relating to results of operations and financial condition, capital
spending, financing sources, commodity prices and costs of production.
By their nature, forward-looking statements are subject to numerous
risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, actual results may differ
materially from those predicted. A number of factors could cause actual
results to differ materially from the results discussed in such
statements, and there is no assurance that actual results will be
consistent with them. Such factors include fluctuating commodity
prices, capital spending and costs of production, and other factors
described in the Company's most recent Annual Information Form under
the heading "Risk Factors" which has been filed electronically by means
of the System for Electronic Document Analysis and Retrieval ("SEDAR")
located at www.sedar.com. Such forward-looking statements are made as at the date of this news
release, and the Company assumes no obligation to update or revise
them, either publicly or otherwise, to reflect new events, information
or circumstances, except as may be required under applicable securities
For the purposes of calculating unit costs, natural gas has been
converted to a barrel of oil equivalent (boe) using 6,000 cubic feet
equal to one barrel (6:1), unless otherwise stated. The boe conversion
ratio of 6 mcf: 1 bbl is based on an energy equivalency conversion
method and does not represent a value equivalency; therefore boe may be
misleading if used in isolation. This conversion conforms to the
Canadian Securities Regulators' National Instrument 51-101 - Standards
of Disclosure for Oil and Gas Activities.
SOURCE EXALL ENERGY CORPORATION
For further information:
| Exall Energy Corporation |
| Frank S. Rebeyka |
| || || Roger N. Dueck |
President & CEO
Tel: 403-237-7820 x 223
| || || Warren F.E. Coles |
VP - Finance & CFO
Tel: 403-237-7820 x 224
Please visit Exall Energy's website at: www.exall.com
Renmark Financial Communications Inc.
Maurice Dagenais: email@example.com
Florence Liberski : firstname.lastname@example.org
Tel.: (514) 939-3989 or (416) 644-2020