Richards Oil & Gas Provides Operational Update



    CALGARY, Oct. 14 /CNW/ - Richards Oil & Gas Limited (the "Company") (TSX
Venture: RIX) is pleased to provide an operational update on activities in the
third quarter of 2008 and for the balance of the year.

    
    Highlights

    -   Production from the Company's properties has been steady for the
        month of September and into early October with current volumes
        estimated at 200 boe per day.
    -   All of the requisite licensing, permitting and land acquisitions have
        been completed on the Company's Thorsby gas processing facility with
        construction of the compressor station and the gas gathering system
        now underway.
    -   The Company anticipates exiting 2008 with production between 360 to
        420 boe per day based on the completion of the gas processing
        facility at Thorsby combined with increased production from the
        Company's Morningside/Lacombe area. Management is encouraged with the
        recent drilling success in the area.
    

    Drilling and Completion Activities and Current Operations

    In the third quarter of 2008, the Company successfully drilled five wells
(4.4 net) targeting the Horseshoe Canyon coals and the intermingled sands,
with four (4.0 net) of these wells drilled on the Company's Thorsby farm-in
lands. In August, the Company re-completed one Morningside/Lacombe Coalbed
Methane ("CBM") well (0.6 net) in the intermingled sands, adding over 400 mcf
per day of net gas production capacity from this well. The Company is
currently working with the owner of the sales line to increase overall
production capacity from this area so that this well can be produced at its
full capacity. In addition to these drilling and completion operations, the
Company also carried out regulatory pressure control work in the
Morningside/Lacombe area. This work, combined with some compressor
optimization efforts, reduced total Company production volumes to
approximately 180 boe per day for the months of July and August.

    Thorsby Gas Processing Facility

    Construction of the Company's Thorsby gas processing facility began
today. The Thorsby gas processing facility will be a central compression
facility with a large diameter trunk line that will be 75% owned and operated
by the Company. The facility has been designed to achieve a low inlet pressure
to maximize CBM production, minimize operating costs, and will provide for low
cost tie in of future development wells. Facility completion and commissioning
is anticipated for the end of November 2008 when nine standing wells (6.9 net)
will be tied in.

    Production Growth to Year End

    The Company is working through the regulatory process at Thorsby to allow
for co-mingled production from CBM and sands. This production, without
co-mingling, is estimated to add 145 to 205 boe per day of net production. An
additional 90 mcf per day or 15 boe per day is expected from the additional
well at the Company's Morningside/Lacombe area once the recently completed
well can be produced at its full capacity. These production increases, without
co-mingling approval, will result in a 2008 exit rate for the Company between
360 to 420 boe per day. Once co-mingled production is approved at Thorsby an
additional 80 to 100 boe per day of net production is expected to accrue to
the Company from the wells tied in November 2008.

    Crossfield Area Update

    The Company has two standing wells in the Crossfield area that have each
been flow tested at over 120 mcf per day from the CBM and sand zones. The
Company is evaluating alternatives to get this gas to market along with
additional land opportunities in the area. In addition, a recent evaluation of
Company owned 3D seismic indicates there is deeper Elkton gas and Viking oil
potential at Crossfield. The Company is presently seeking joint venture
partners to participate in these conventional opportunities.

    Summary

    The Company is very proud of the progress it has made in furthering the
development of its Thorsby property. Just over one year ago the Company had no
production from the area and held only 7 sections of land (2.1 net). Since the
third quarter of 2007 the Company has; demonstrated successful Horseshoe
Canyon CBM production from two wells, earned and acquired an additional 11 net
sections of land, drilled 17 (14.3 net) wells and initiated construction of a
scalable gas processing facility that will allow the Company to economically
develop the resources in the Thorsby area.
    Through its drilling and completion efforts over the past year the
Company has been able to substantiate its expectations that the Horseshoe
Canyon coal package is well developed in the Thorsby area and the initial flow
rates from the various Edmonton sand zones in many well bores has been greater
than expected. This conventional gas production, in addition to the CBM, will
result in increased production, reserves and project economics.
    The additional production will provide the Company with a significant
increase in cash flow into 2009 that will be used to tie in the five 2008
standing wells (5.0 net) at Thorsby and drill additional wells. The magnitude
of capital expenditures for 2009 will be determined by the amount of available
cash flow which is affected by natural gas pricing, operating cost performance
and market conditions.

    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 shallow natural gas resources including coal bed methane
(CBM). With a significant land base and industry-leading experience in the
development of CBM and conventional natural gas projects, 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 experience in the development of CBM and conventional
gas 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, estimates of proven and probable
reserves, 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: go to our website at www.richardsoilandgas.com
or please contact: 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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