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CALGARY, Feb. 17 /CNW/ - Great Plains Exploration Inc. (TSX - GPX) (Great
Plains) is pleased to provide a brief progress report on its winter capital
program and drilling plans for the first half of 2009. In response to current
and forecast commodity prices, the Company has scaled back its spending plans
and has chosen to focus solely on projects that provide opportunity for
material production growth.
In Northeast BC, Great Plains has drilled or is drilling three
exploratory tests at Klua, Gunnel and Helmet plus a series of workover and
recompletion projects designed to increase throughput at the Company's 100%
owned Klua facility. The Klua well which targeted Keg River gas was drilled
and cased in late December but did not encounter the expected dolomitic
porosity; however, a number of interesting intervals with lower porosity were
encountered and a completion and evaluation program is expected to commence at
the beginning of March. Additionally, there appears to be uphole potential in
the Debolt formation. A pipeline license has been obtained to tie this well
into the Klua gas plant. Great Plains operates and will retain a 75% interest
after paying 50% of the costs of drilling, completing and tie-in of the Klua
At Gunnel, a 100% exploratory test has been drilled, cased and completed
as a potential Debolt gas well. Initial completion results are encouraging and
pressure testing and evaluation is ongoing. The well tested at a rate of
approximately 20 e3m3/d (710 mcf/d), with further stimulation expected to
improve this preliminary rate. A pipeline license has been acquired for the
Gunnel well which would allow tie-in this winter season pending final test
Great Plains has commenced drilling operations at Helmet to drill a well
analogous to an existing Great Plains gas well currently producing from the
Debolt formation at approximately 2 MMcf/d. This new well is targeting 2 to 3
bcf of gas with Great Plains operating and holding a 50% working interest.
Pending a successful completion, this well will require a 100 metre tie-in to
existing infrastructure which would allow for the commencement of production
before break up. The Great Plains technical team has identified three to five
potential follow-up locations at Helmet which could be drilled in winter
2009-2010 subject to commodity prices and capital availability.
In Northeast BC generally, the Great Plains technical team will continue
to focus on assembling and refining a multi-year prospect inventory supported
by an extensive seismic database. The Company's area land base totals
approximately 50,000 acres plus an additional 370,000 acre block in which
Great Plains has the exclusive right to explore over a four year period.
In the Greater Pembina area, Great Plains continues to actively pursue
the evaluation and extension of the Nisku oil fairway. The Company will
participate in a total of three wells which are currently licensed with a
fourth license expected within the next month. A fifth license application for
a location at 14-35-5-6 W5M (46% W.I.) will go to a hearing process commencing
in April with potential for a ruling by summer 2009.
Of the wells which are currently licensed, Great Plains is participating
at 40% working interest in an exploratory test which has commenced drilling at
14-33-50-5 W5M. A successful outcome at this location would allow for the
construction of a pipeline to produce not only the 14-33 well, but behind pipe
volumes from a previously announced discovery (see press release dated January
23, 2008) at 11-12-51-5 W5M which tested at 1,400 BOPD (26%-40% W.I.).
The remaining two current Nisku licenses are in the Tomahawk area at
1-16-51-6 W5M (25% W.I.) and 9-17-51-6 W5M (25% W.I.). The 1-16 test involves
deepening a well drilled by Great Plains and its partners two years ago which
had not been drilled to the Nisku due to licensing issues. This operation is
expected to commence in July and will require very little capital given the
amount already spent on the well to-date. A successful outcome at 1-16 will
set up the 9-17 location as well as provide sufficient reserves for pipeline
construction. This in turn would allow for the tie-in of shut-in volumes from
existing discoveries at 15-7-51-6 W5M (35% W.I.) which tested at 650 BOPD and
8-35-50-7 W5M (32.5% W.I.) which tested at 400 BOPD.
Great Plains and its partner are expecting a license to be granted
immediately for the drilling of a new pool test in Crossfire, approximately
2.5 km south-east of the Q2/08 Nisku oil discovery at 9-1-50-5 W5M. Based on a
proposed pooling agreement, Great Plains expects to participate at a 15%
working interest in this test which if successful, may lead to at least one
additional location. The 9-1 well which had produced since September at
average rates in excess of 2,000 BOEPD (17.5% W.I.) was shut-in at the end of
2008 for a bottom hole pressure survey and remains shut-in, pending analysis
of pressure data and testing and evaluation of a potential injection well at
3-1-50-5 W5M, which is currently being completed by Great Plains and its
partners. Net production to Great Plains from the 9-1 well is approximately
400 BOEPD. Subject to the results of the foregoing operations and regulatory
approval, production may resume as early as April.
Great Plains production averaged approximately 1,975 BOEPD through Q4
with December and January volumes negatively impacted by extreme weather
conditions in Northeast BC and mechanical breakdowns at Randell. Production
volumes for early February averaged 1,590 BOEPD which reflects the current
shut-in of the 9-1 well at Crossfire and the temporary curtailment of
approximately 100 BOEPD at Klua, due to line pressure problems for one well
which are expected to be resolved in April or May.
While industry conditions require substantial reductions in capital
spending, Great Plains remains confident in its ability to execute the
aforementioned projects and their potential for material production additions.
The Company's credit facilities are drawn by approximately $22 million against
available lines of $38 million. Subject to the potentially material results of
wells currently drilled or planned and expected commodity pricing, the Company
expects to review its capital program for the balance of 2009 in April.
Advisory Regarding Forward-Looking Statements
This press release contains forward-looking statements which include, but
are not limited to: anticipated maximum proceeds of the private placement,
projected timing of closing, expectations, opinions, forecasts, projections,
guidance or other statements that are not statements of fact. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it cannot give any assurance that such expectations
will prove to be correct. Results of the Company may be affected by a variety
of variables and risks associated with oil and gas exploration, production and
transportation, such as loss of market, volatility of oil and gas prices,
currency fluctuations, imprecision of reserve estimates, environmental risks,
competition from other producers, ability to access sufficient debt and equity
capital from internal and external sources, ability to replace and expand oil
and gas reserves, ability to generate sufficient cash flow from operations to
meet its current and future obligations, and risks associated with existing
and potential future lawsuits and regulatory actions made against the Company;
as a consequence, actual results could differ materially from those
anticipated or implied in the forward-looking statements.
The Company's forward-looking statements are expressly qualified in their
entirety by this cautionary statement and are made as of the date of this news
release. Unless otherwise required by applicable securities laws, the Company
does not intend nor does it undertake any obligation to update or review any
forward-looking statements to reflect subsequent information, event, results
or circumstances or otherwise.
For further information:
For further information: Great Plains Exploration Inc.: Stephen P.
Gibson, President & CEO, Sean Bovingdon, VP Finance & CFO, Tel: (403)
262-9620, Fax: (403) 262-9622, Website: www.greatplainsexp.com, Email: