CALGARY, April 24 /CNW/ - Richards Oil & Gas Limited (the "Company"),
(TSX Venture: RIX) announces the status of preliminary testing of its
horizontal test well that was drilled last December to evaluate the Ardley
coal seams for dry gas production from a horizontal well bore. The Company
also reports on its continued Horseshoe Canyon CBM development including its
recent completion and stimulation of a test Horseshoe Canyon well at Thorsby.
ARDLEY TEST PROGRAM
Testing in the Ardley horizontal well indicated that the well is capable
of flowing dry methane, but at rates that were comparable to the adjacent
vertical well (35 to 40 mcf/d).
A detailed analysis of the preliminary test data indicates that the coal
seams suffered damage due to drilling fluid invasion and that subsequent
stimulation undertaken to overcome the damage was not effective. The Company
plans to re-enter the well and apply a more aggressive stimulation technique
that is expected to overcome the damage. The stimulation technique will be
first tested on a vertical well before application in the horizontal well
bore. The Company anticipates completing the work in the vertical well as soon
as possible after spring break-up.
"We are learning valuable information about drilling and getting
production from the dry Ardley coal seams," said Eric Allen, Vice President,
Operations of Richards.
"One of the key objectives in designing this first horizontal well
drilled into the Ardley was to establish that the well bore could be kept
open. The fluid system chosen to drill the well was a compromise between
possible invasion effects and hole stability concerns. The Company is
designing its next horizontal well with a different approach using an `in
balance' fluid system."
"We are confident that horizontal drilling coupled with improved fluid
systems and stimulation techniques will advance our Ardley project toward
commerciality," Allen said.
The Company will be continuing its testing of the Ardley coals by
drilling three vertical and one horizontal well in the Lambert, Ansell and
Marsh areas in July and August. Stimulation and testing is planned for the
previously drilled horizontal well and the new wells. These activities, which
will give the Company the data required to further advance the necessary
drilling and completion processes, are to be carried out with funds on-hand.
HORSESHOE CANYON DEVELOPMENT PROGRAM
The Company has over eighty potential drilling locations at its four
Horseshoe Canyon development plays at Morningside, Lacombe, Thorsby and
The Company currently has 7 Horseshoe Canyon wells behind pipe at
Morningside. These wells will be tied in by August, 2007 and will add
approximately 400 mcf/d net of production to the Company. The Company
currently has 2 (gross) Horseshoe Canyon wells on production at Morningside,
producing 200 mcf/d net to the Company.
The Company has a two-stage development drilling program at Lacombe. The
first stage is an eleven well program, planned to be drilled, tied-in and on
production in August, 2007. The second stage development program consists of
an additional forty wells and the requisite gathering and pipeline system and
facilities. The Company currently has 9 (gross) Horseshoe Canyon wells on
production, producing 300 mcf/d net to the Company.
The Company has one development well to drill at Crossfield. The well is
scheduled for drilling shortly after spring break up. Once this well has been
drilled flow tests will be completed on both this well and an existing well in
The Company drilled and stimulated a Horseshoe Canyon well in February.
The well response appears to be equivalent to the Company's Morningside wells,
with no water production evident so far. The Company is planning to tie-in the
Thorsby well to existing pipe after production testing to establish pressures
and flow-rates. The Company has interests in 4,640 gross acres of land and a
30% interest in the gas sales pipeline at Thorsby.
Richards Oil & Gas Limited (www.richardsoilandgas.com) 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.
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: Brad Turner, President & CEO, Richards Oil &
Gas Limited, Tel: (403) 265-8444, E-Mail: email@example.com; Lonn
Bate, CFO, Richards Oil & Gas Limited, Tel: (403) 265-8444, E-Mail: