CALGARY, Feb. 12 /CNW/ - Richards Oil & Gas Limited (the "Company")
(TSX Venture: RIX) is pleased to announce that with the new wells drilled and
tied in at Morningside, total Company production for February 2008 is
estimated to be 220 boe per day.
With this increased production, reduced general and administrative costs
and the current sales price for natural gas, the Company has reached the
milestone of generating positive cash flow on a monthly basis.
In addition, recent drilling and completion efforts on the Company's
Thorsby property has shown positive gas production results from both the
Coalbed Methane ("CBM") and the comingled conventional sands.
Horseshoe Canyon CBM Properties Update
The Company drilled four wells (2.4 net) in December 2007. Flow testing
of these wells, which were completed in coal and sand zones, indicates that
the average production per well will be over 100 mcf per day. Pipeline design
and planning is currently underway and these wells are expected to be on
production in the spring of 2008.
The Company has also initiated an additional six well (5.6 net) drilling
and completion program to be completed before the end of March 2008 on its
recently announced farm in lands. These low-risk, low-cost new wells will be
tied in to production facilities as soon as possible in the second quarter
depending on the timing and duration of spring break up.
With the completion of the six new wells the Company will have an earned
interest in 14 sections of land with a 74% average working interest and a 30%
interest in a gas sales pipeline in the Thorsby area. The Company has an
option to earn an additional nine sections of land contiguous to the current
In Morningside, during January and early February 2008, the Company tied
in the six Horseshoe Canyon wells (2.4 net) that were drilled in
December 2007. In addition, three wells that were producing from coals only
were recompleted adding significant gas production from the co-mingled
conventional sands. Production from the 15 wells in the area ranges from
60 mcf per day to over 600 mcf per day, per individual well, with an average
of 110 mcf per day, per well. The development of the Morningside area is now
effectively complete and Richards is very pleased with the results of this
program as it is proof of the Company's technical ability to successfully
identify and develop CBM properties on the western edge of the known Horseshoe
Canyon CBM fairway.
In Lacombe, the Company is currently reviewing additional drilling
opportunities with its partner that operates this area. The Company has
18 (gross) Horseshoe Canyon wells on production, producing over 350 mcf per
day net to the Company.
The Company has two standing wells that have flow tested at over
120 mcf/d from coal and sand zones. The Company is evaluating alternatives to
get this gas to market along with additional land opportunities.
The Company has over 160 (gross) potential drilling locations at these
four Horseshoe Canyon development plays. Full development of these areas would
result in the potential for the Company to produce approximately 10,000 mcf
per day (net) on a risked basis.
The Company continues to execute its plan of taking advantage of the
lower cost and high availability of field services to increase production from
its Horseshoe Canyon properties while continuing to prove up the large
resource potential of its Ardley properties. Also, the Company will continue
to secure additional land interests in its operating areas based on sound
economic evaluation and available opportunities.
About Richards Oil & Gas Limited
Richards Oil & Gas Limited is a Calgary-based exploration company,
involved in the development of crude oil and natural gas, with an emphasis on
the exploitation of coal bed methane (CBM). With a significant land base and
industry-leading experience in the development of CBM projects, the Company is
at the forefront of the CBM industry in Western Canada. The Company is able to
capitalize on opportunities that create both short-term cash flow and
long-term value for its shareholders.
Coalbed Methane (CBM) or Natural Gas from Coal (NGC) is technically
defined as gas produced naturally by coalification, and found within coal
natural gas reservoirs consisting predominately of methane, with smaller
amounts of higher hydrocarbons, water vapor, nitrogen, carbon dioxide, or
other non-hydrocarbons. The majority of gas is usually physically sorbed
within the microporosity and mesoporosity within the organic matrix. The
Company's management has extensive experience in the development of CBM
projects, which it is using to exploit the Company's land base and to add and
sustain significant value for its shareholders.
BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
Statements in this news release contain forward-looking information
including expectations of future production, procurement of drilling permits,
plans for and results of exploration and development activities and other
operational developments. The reader is cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, as a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of the Company. These
risks include, but are not limited to; the risks associated with the oil and
gas industry, commodity prices, and exchange rate changes. Industry related
risks include, but are not limited to; operational risks in exploration,
development and production, availability of skilled personnel and services,
failure to obtain industry partner, regulatory and other third party consents
and approvals, delays or changes in plans, risks associated with the
uncertainty of reserve estimates, health and safety risks and the uncertainty
of estimates and projections of reserves, production, costs and expenses. The
reader is cautioned not to place undue reliance on this forward-looking
information. The forward-looking statements contained herein are subject to
change. Except as required by applicable securities laws, the Company assumes
no obligation to update or revise any forward-looking statements should
circumstances or management's opinions or estimates change.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news release.
For further information:
For further information: go to our website at www.richardsoilandgas.com
or please contact: Brad Turner, President & CEO, Tel: (403) 265-8444, E-Mail:
email@example.com; Lonn Bate, CFO, Tel: (403) 265-8444, E-Mail: