Richards Oil & Gas Limited Provides Update on its Ardley and Horseshoe Canyon Drilling Results



    CALGARY, Sept. 27 /CNW/ - Richards Oil & Gas Limited (the "Company"),
(TSX Venture: RIX) announces that drilling and testing activities on its
Lambert, Ansell and Marsh properties is continuing and the Company is making
progress toward proving the commercial production potential of its Ardley
Coalbed Methane ("CBM") exploration opportunity. The Company also reports that
it is adding production from 13 gross (7.6 net) Horseshoe Canyon CBM wells at
its Morningside, Lacombe and Thorsby properties. With the addition of these
new wells, net production in early October 2007 is estimated to stabilize at
215 boe per day, up 101 boe per day or 89% from the Q2 2007 production rate.

    
    Ardley Update
    -------------

    Activities for the third quarter of 2007 included:

    -   Drilled one horizontal well on the Company's Ansell property, using
        an experimental "dry" in-balanced drilling process. The Company
        achieved a 50 metre horizontal leg into the Ardley coals which has
        shown reservoir pressure and potential gas flow rates similar to the
        500 metre horizontal leg drilled at the Company's Marsh property,
        indicating the potential for a commercially viable multi-lateral
        well.
    -   Drilled two vertical wells on the Company's Lambert property which
        have demonstrated dry coal seams capable of gas production,
        indicating that this additional area has potential for a horizontal
        drilling program.
    -   Re-entry, clean up and flow measurement of the previously drilled
        horizontal well on the Company's Marsh property demonstrated
        reservoir pressure build up and improved flow of gas compared to the
        initial testing done in early 2007.
    -   A new stimulation technique that has the potential to significantly
        reduce stimulation costs for future CBM development programs was used
        at a previously drilled Lambert area well. This new stimulation
        technique did not achieve the desired result in this first
        application and the Company is continuing to work to prove the
        viability of this new stimulation technique.
    

    Fourth quarter 2007 plans for the Company's Ardley CBM exploration
opportunity are to drill additional multi-lateral horizontal legs in the
Ansell well using an in-balanced "mist" system to increase well bore length
and production. It is anticipated that this well will then be tied into a
low-pressure pipeline that is in close proximity to allow for long-term flow
testing and analysis.
    The Company has earned a further 18 sections of land (13.1 net) in the
Ardley through 2007 drilling activity and now has 41 sections earned (23.9
net) and 24.5 sections under option (12.9 net).
    The Company's earned and optioned lands in the Ardley coals contain
approximately 1 TCF of gross in-situ CBM natural gas resource. Allowance for
net working interest position and the resource evaluator's assumptions of
likely horizontal well development based on select coal seams within the
Ardley, results in a discovered resource base of 136 BCF of natural gas net to
Richards Oil & Gas Limited.

    Horseshoe Canyon Update
    -----------------------
    The Company has over 100 (gross) potential drilling locations at its four
Horseshoe Canyon development plays at Morningside, Lacombe, Thorsby and
Crossfield.

    Morningside
    -----------
    The Company has tied in the 7 Horseshoe Canyon wells (5.0 net) that were
drilled prior to 2007. These wells are expected to be on production in early
October and produce over 400 mcf per day net to the Company. The Company plans
to drill and tie in five additional wells before year end. Year end production
from this area is anticipated to be 800 mcf per day.

    Lacombe
    -------
    The Company drilled and tied-in five gross wells (2.1 net) that went on
production during September. The Company plans to drill and tie-in three
(gross) additional wells by year end. The Company currently has 16 (gross)
Horseshoe Canyon wells on production, producing 500 mcf per day net to the
Company.

    Thorsby
    -------
    The Horseshoe Canyon well that was drilled and stimulated in February
2007 was brought on production in August. The well is currently producing at
greater than 100 mcf per day. The Company has interests in 4,640 gross acres
of land and a 30% interest in the gas sales pipeline in the Thorsby area.

    Crossfield
    ----------
    The Company drilled and completed the Horseshoe Canyon coals in one well
at Crossfield in July and has stimulated the coals and the sands in the
original development well drilled in the fall of 2006. Flow testing is
currently underway and initial results appear to be similar to the Company's
other Horseshoe Canyon wells with the added potential for natural gas
production from the co-mingled sands.

    Other Property Update
    ---------------------

    Gadsby
    ------
    Production from two of the three wells in conventional gas zones
continued to decline and produce water. Current net production from this area
is 250 mcf per day net to the Company. Enhanced recovery equipment continues
to operate on two of the wells and the Company is evaluating the use of low
horsepower compression to enhance gas production. In that the Company has
existing pipeline infrastructure and the Mannville coal is the main target
formation at Gadsby, a test of the Mannville coals in one of the Company's
existing wellbores will be performed before year end which will include
stimulation and flow testing.

    Silverdale, Lone Rock and Manitou Lake
    --------------------------------------
    Net production from these non-operated heavy oil properties is 13 boe per
day, down from 17 boe per day in early 2007. A recent pump change on the Lone
Rock well has improved production by 35% and the Manitou Lake well has been
suspended as uneconomic. The Company is reviewing additional drilling
potential in the Silverdale and Lone Rock areas with the operators given their
undeveloped land base and seismic coverage, in response to recent offset
activity. Net production from these areas is anticipated to be 10 to 13 boe
per day for the remainder of 2007.

    Summary
    -------
    The economic impact to the Company of the recently released Alberta
Royalty Review Report is expected to be favourable to neutral given the
production levels typically of the Company's Horseshoe Canyon CBM wells.
Regardless of whether the Alberta government accepts the recommendation from
the Royalty Review Panel, the Company continues to execute its plan of taking
advantage of the lower cost and improved availability of field services to
increase production from its Horseshoe Canyon properties while working to
prove up the large resource potential of the Ardley. The Company will continue
to secure additional land interests in its operating areas, pursue additional
large CBM resource plays and review corporate opportunities. All of these
activities are consistent with the Company's strategy to capitalize on CBM
opportunities that create both short-term cash flow and long-term value for
its shareholders.
    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 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.

    ADVISORIES

    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.

    %SEDAR: 00021365E




For further information:

For further information: Brad Turner, President & CEO, Richards Oil &
Gas Limited, Tel: (403) 265-8444, E-Mail: bturner@richardsoilandgas.com; Lonn
Bate, CFO, Richards Oil & Gas Limited, Tel: (403) 265-8444, E-Mail:
lbate@richardsoilandgas.com

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Richards Oil & Gas Limited

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