Toronto Stock Exchange: SCS
83,986,964 Common Shares
CALGARY, Feb. 13, 2012 /CNW/ - Second Wave Petroleum Inc. (TSX:SCS)
("Second Wave" or the "Company") is pleased to provide an update on its
Judy Creek Beaverhill Lake light oil drilling program.
Completed its first three well pad in the Beaverhill Lake formation with
initial three day flow rates from its 15-22-063-10W5, 16-24-063-10W5
and 01-25-063-10W5 wells estimated at 1,470 bbl/d, 1,250 bbl/d and
1,450 bbl/d, respectively, of light oil. These three light oil wells
were drilled from the surface location of 01-26-063-10W5 and Second
Wave has a 40% working interest in each well.
Completed the first of two wells from its surface pad located at
13-06-064-09W5 with the 13-01-064-10W5 well (40% working interest)
testing at an initial flow rate estimated at 1,625 bbl/d of light oil
over a seven day test period. The second well on the 13-06 pad has been
drilled and is scheduled to be completed and flow tested in late
Completed its 100% working interest 01-17-062-10W5 Beaverhill Lake light
oil well in south Judy Creek with an initial two day flow test rate
estimated at 800 bbl/d of light oil further delineating the Company's
south Judy Creek land base. The Company is continuing to flow test the
01-17 well at the time of this release.
Drilled, completed and brought on production its first successful
exploration well on its south east Judy Creek land block with an
initial five day flow test rate at its 10-05-063-09W5 well (40% working
interest) estimated at 400 bbl/d of light oil.
To date in Judy Creek, the Company has drilled, completed and brought on
production 18.0 gross (9.0 net) horizontal Beaverhill Lake oil wells
with 6.0 gross (3.0 net) wells waiting on completions and 3.0 gross
(1.2 net) wells currently drilling. Average flow test rates to date
have exceeded 600 bbl/d per well over test periods ranging from three
to sixty days.
The Company cautions that test results are not necessarily indicative of
long-term performance or ultimate recovery.
During the first quarter of 2012 the Company has been operating three
drilling rigs dedicated to the Beaverhill Lake formation in Judy Creek.
To date the Company has drilled, completed and brought on production
18.0 gross (9.0 net) horizontal Beaverhill Lake oil wells, with 6.0
gross (3.0 net) wells standing waiting on completions and 3.0 gross
(1.2 net) wells currently being drilled. Average initial flow rates to
date for the 18 completed wells have exceeded 600 bbl/d per well over
test periods ranging from three to sixty days. Of these wells, 5.0
gross (2.6 net) Beaverhill Lake oil wells have been completed in 2012
and Second Wave is currently scheduled to complete an additional four
wells per month for the remainder of 2012. Our accelerated completion
schedule is the result of shorter production flow test periods on new
wells as the Company has begun to accelerate its pipeline and well site
construction schedules to accommodate an overall reduction in its cycle
times and capital costs as it transitions to a full developmental
drilling program in the Beaverhill Lake formation.
In the fourth quarter of 2011 the Company drilled its first three well
pad in the Beaverhill Lake formation from the surface location of
01-26-063-10W5. Completion operations on this pad occurred in January
of 2012 with initial three day flow test rates from its 15-22-063-10W5,
16-24-063-10W5 and 01-25-063-10W5 wells estimated at 1,470 bbl/d, 1,250
bbl/d and 1,450 bbl/d, respectively, of light oil. Second Wave holds a
40% working interest in these three light oil wells.
The Company cautions that short flow test results may not necessarily be
indicative of long-term performance or ultimate recovery.
In February, the Company completed the first of two wells off of its
multi-well pad located at the surface location of 13-06-064-09W5 with
an initial seven day flow test rate from the 13-01-064-10W5 well (40%
working interest) estimated at 1,625 bbl/d of light oil. The second
well that was drilled off of this pad to the bottom hole location of
13-05-064-09W5 (40% working interest) is currently standing and is
scheduled to be completed and flow tested in February.
Production from the 01-26-063-10W5 and the 13-06-064-09W5 pads have been
pipelined connected to Second Wave's operated oil batteries at
08-24-063-10W5 and 04-31-063-10W5, respectively, with solution gas
processed at the Company's operated gas plant located at
08-24-063-10W5. Initial production from these two pads is scheduled to
occur in February after pumpjacks and surface facilities have been
installed at the well sites. The Company expects gross initial
production rates on the above noted four wells to be restricted at 225
bbl/d of light oil by surface pumping capacities and maximum rate
Results from the above noted four completed wells have met the Company's
expectations and management believes further substantiate the
Beaverhill Lake reservoir quality on the west side of Second Wave's
land base in Judy Creek.
In the south portion of its Judy Creek land base the Company has
successfully completed 2.0 gross wells (1.4 net) with the
01-17-062-10W5 (100% working interest) and 10-05-063-09W5 (40% working
interest) wells testing at initial flow rates over a two and five day
period estimated at 800 bbl/d and 400 bbl/d, respectively, of light
As a result of down hole mechanical issues the 10-05-063-09W5 (40%
working interest) horizontal well was not fracture stimulated as down
hole limitations required lower acid pumping rates and pressures. The
10-05 and 01-17 wells will come on production to single well battery's
in the first quarter of 2012. The Company believes that both wells will
have initial 30 day pumping production rates of 150 to 200 bbl/d of
light oil. The Company is following up its success in this area with an
additional two wells at 05-07-063-09W5 and 07-09-063-09W5 which are
standing waiting on completion and a third well drilling at
13-30-062-09W5. The Company holds a 40% working interest in all three
wells and expects them to be completed and on production in the first
half of 2012.
Results from the 10-05 and 01-17 wells have met the Company's
expectations and have set-up an additional 10 to 20 gross (33 to 100%
working interest) section light oil development program in the
Company's south Judy Creek land block. The Company has an active
drilling program in this area planned for 2012 with 5 to 10 additional
Beaverhill Lake horizontal oil wells forecast to be drilled in 2012.
The Company continues to gain momentum with its light oil Beaverhill
Lake drilling program in Judy Creek. Corporate production and netbacks
in the fourth quarter of 2011 are estimated at 2,175 boe/d (77% oil and
natural gas liquids) and $49.00 per boe, respectively, based on
unaudited financial and operating data. The Company's Beaverhill Lake
production is estimated to have increased to approximately 1,200 boe/d
in the fourth quarter from 484 boe/d in the third quarter. Operating
netbacks on its Beaverhill Lake production exceeded $75.00 per boe in
the fourth quarter based on unaudited financial and operating data.
The Company estimates its current production based on field estimates to
be approximately 3,000 boe/d (80% oil and natural gas liquids). For the
remainder of the first half of 2012 the Company expects its corporate
production to fluctuate between a base level of 2,500 and 3,500 boe/d
(80% oil and natural gas liquids) depending on a number of variables
including frac schedules, flow test lengths, pipeline construction and
single well battery construction cycle times as well as general spring
break-up related delays.
Second Wave believes it is positioned to meet its previously announced
2012 production exit target of 5,000 boe/d (80% oil and natural gas
liquids) with its Beaverhill Lake production expecting to reach
approximately 4,000 boe/d by year end. The Company anticipates drilling
39 gross (16.8 net) Beaverhill Lake light oil horizontal wells in 2012.
As additional light oil volumes come on production in 2012 the Company
expects its operating netbacks to continue to increase throughout the
remainder of the year.
The Company anticipates providing a further operational update as
year-end financial and reserve information is released later in the
first quarter of 2012.
Barrels of Oil Equivalent (BOEs). The term BOE refers to barrel of oil equivalent, with natural gas
converted to crude oil equivalent at a ratio of six thousand cubic feet
to one barrel. BOEs may be misleading, particularly if used in
isolation. A BOE conversion ratio of six mcf (six thousand cubic feet)
to one bbl (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.
Forward-Looking Statements. This news release contains forward-looking statements as to the
Company's internal projections, expectations and beliefs relating to
future events or circumstances. Forward-looking statements are
typically (but not necessarily) identified by words such as
"anticipate", "believe", "budget", "estimate", "expect", "plan",
"intend", "potential", "may", "will", "should" or similar words
suggesting future outcomes. Although the Company believes that these
forward-looking statements are reasonable, undue reliance should not be
placed on them as they are subject to known and unknown risks and
uncertainties, many of which are beyond the Company's control.
Forward-looking statements are not guarantees of future outcomes. There
can be no assurance that the plans, intentions or expectations
contained in the forward-looking statements or upon which they are
based will in fact occur or be realized, and actual results may differ
from those expressed or implied in the forward-looking statements. The
difference may be material.
Second Wave is subject to the inherent risks associated with the
exploration, development, exploitation and production of oil and gas.
More particularly, material risk factors that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements contained in this news release include:
adverse changes in commodity prices, interest rates or currency
exchange rates; accessibility of capital when required and on
acceptable terms; lower than expected production of crude oil and
natural gas; production delays; lower than expected reserve volumes on
the Company's properties; increased operating costs; ability to attract
and retain qualified personnel or to secure drilling rigs and other
services on acceptable terms; competition for labour, equipment and
materials necessary to advance the Company's projects; unforeseen
engineering, environmental or geological problems; ability to obtain
all required regulatory approvals on a timely basis and on satisfactory
terms; and changes in laws and governmental regulations (including with
respect to taxes and royalties). This list is not exhaustive. Readers
should also review the risk factors described in other documents filed
by the Company from time to time with securities regulatory authorities
in Canada, including its most recent annual information form, copies of
which are available electronically at www.sedar.com and at www.secondwavepetroleum.com.
Specific forward-looking statements contained in this news release
include statements regarding: the Company's ability to internally
process all of its Beaverhill Lake emulsion by the end of 2011 and the
consequential reduction in operating costs; the number of wells
expected to be completed in 2011 and standing awaiting completion at
year end; the estimated production rate for the fourth quarter of 2011;
and average and exiting production rates forecast for 2012. In making
such forward-looking statements, Second Wave has made various
assumptions regarding, among other things: the accuracy of geological
and geophysical data and interpretations of that data; future oil and
natural gas prices; future capital requirements; future exchange rates;
the accessibility and cost of capital (including credit); the Company's
ability to economically produce oil and gas from its properties and the
timing and cost to do so; and its ability to obtain qualified staff,
equipment and supplies in a timely and cost-efficient manner.
The forward-looking statements included herein are made as of the date
of this news release and Second Wave undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as may be
required by securities laws.
SOURCE Second Wave Petroleum Inc.
For further information:
Colin B. Witwer, President and CEO
Randy Denecky, VP, Finance and CFO
Second Wave Petroleum Inc.
Calgary, Alberta, Canada
Telephone: (403) 451-0165