CALGARY, Jan. 11 /CNW/ - ProspEx Resources Ltd. ("ProspEx" or the "Company") is providing an operational update with respect to recent drilling activity at its East Kakwa project in the Deep Basin.
"The initial flow test results from ProspEx's most recent horizontal well substantially exceed results from our successful first horizontal well announced in September, 2009. These results provide further evidence of the ability of horizontal, multi-frac drilling technology to dramatically improve production at East Kakwa, and of our successful strategic transition to repeatable projects utilizing this technology", said John Rossall, President and Chief Executive Officer.
At East Kakwa, ProspEx's second horizontal well at 15-19-64-4W6 (the "15-19 well") has been successfully drilled and completed. Following completion, the well produced up 4 1/2" casing on clean up test for 38 hours with a final rate of 24.4 million cubic feet ("mmcf") per day at a flowing wellhead pressure of 1,570 pounds per square inch ("psi"). A 21 hour extended flow test was then performed, with the well flowing up 2 3/8" tubing at a rate of 16.0 mmcf per day and a flowing pressure of approximately 1,690 psi.
In comparison, ProspEx's first horizontal well at 2-33-63-4W6M (the "2-33 well") produced on clean up test at a rate of 10.9 mmcf per day at a flowing wellhead pressure of 2,380 psi, and at 6.6 mmcf per day on extended test (at a flowing pressure of approximately 2,300 psi). The 2-33 well has been on production since early November 2009, at a facility restricted average rate of approximately 7.8 mmcf per day (approximately 820 barrels of oil equivalent net to ProspEx under its 60% working interest, including associated liquids production) over the first two months of production.
The estimated cost to drill and complete the 15-19 well is $4.0 million, prior to the deduction of the $0.8 million Alberta Drilling Royalty Credit. The 15-19 well is expected to be tied into ProspEx's pipeline system and placed on production in February, 2010. ProspEx is the operator and has a 60% working interest in the 15-19 well.
A third horizontal well (50% ProspEx working interest) on the East Kakwa trend is currently being drilled by ProspEx. Drilling operations should be finished by late January, with completion and testing operations to follow.
The 15-19 and 2-33 wells were located approximately eight kilometres apart. The third horizontal well will extend the trend an additional five kilometres to the north, for a total of approximately 13 kilometres of trend evaluated with horizontal wells. The Company has identified an inventory of 17 gross (8.5 net) drilling locations on this 13 kilometre trend (assuming a drilling density of two wells per section), in addition to the three wells mentioned above.
ProspEx Resources Ltd. is a Calgary-based junior oil and gas company focused on exploration for natural gas in the Western Canadian Sedimentary Basin.
Certain information contained in this press release constitutes forward-looking information or statements including, without limitation, information and statements respecting: anticipated capital expenditures, production results, additions and deletions, technical and commercial viability of prospects, additions to and deletions from the Company's historical and future capital programs, costs of development, operating expenses, G&A, royalties, expected timing of the tie-in of wells, expected timing of the receipt of regulatory approvals and expected timing of the completion of facilities projects.
Forward-looking information and statements are often, but not always, identified by the use of words such as "anticipate", "seek", "believe", "expect", "hope", "plan", "intend", "forecast", "target", "project", "guidance", "may", "might", "will", "should", "could", "estimate", "predict" or similar words or expressions suggesting future outcomes or language suggesting an outlook. By their very nature, forward-looking information and statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking information and statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to vary materially from the forward-looking information or statements. These factors include, but are not limited to: the volatility of oil and gas prices; production and development costs and capital expenditures; the imprecision of reserve and resource estimates and estimates of recoverable quantities of oil, natural gas and liquids; the Company's ability to replace and expand oil and gas reserves; environmental claims and liabilities; incorrect assessments of value when making acquisitions or dispositions; increases in debt service charges; the loss of key personnel; the marketability of production; defaults by third party operators; unforeseen title defects; fluctuations in foreign currency and exchange rates; adequacy of insurance coverage; compliance with environmental laws and regulations; changes in tax and royalty laws; the Company's ability to access external sources of debt and equity capital; and the Company's ability to obtain equipment in a timely manner to carry out development activities. Further information regarding these factors may be found under the headings "Risk Factors" and "Industry Conditions" in the Company's most recent Annual Information Form, under the heading "Business Risks" in the Company's Management's Discussion and Analysis for the year ended December 31, 2008, and in the Company's most recent consolidated financial statements, management information circular, quarterly reports, material change reports and news releases available under the Company's profile on SEDAR (www.sedar.com). Readers are cautioned that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to the Company, investors and others should also carefully consider information set forth in the section "Forward-Looking Information" of the Company's most recent Annual Information Form respecting the assumptions upon which the Company bases certain forward-looking information and the uncertainties inherent in such assumptions.
The Company does not assume responsibility for the accuracy and completeness of the forward-looking information or statements and such information and statements should not be taken as guarantees of future outcomes. Subject to applicable securities laws, the Company does not undertake any obligation to revise these forward-looking information or statements to reflect subsequent events or circumstances. Furthermore, the forward-looking information contained in this press release are made as of the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking information and statements contained in this press release are expressly qualified by this cautionary statement.
For the purposes of this press release, boe have been calculated on the basis of six thousand cubic feet of gas to one barrel of oil. The term boe may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet to one barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
SOURCE PROSPEX RESOURCES LTD.
For further information: For further information: John Rossall, President & CEO or George Yee, Vice President Finance & Chief Financial Officer: firstname.lastname@example.org or (403) 268-3940