CALGARY, April 6 /CNW/ - Breaker Energy Ltd. ("Breaker" or "Company")
(TSX: wav) is pleased to provide initial flow test information from its second
horizontal multi-frac well at its wholly-owned Doig/Montney gas resource
property in Fireweed, British Columbia. The new well was drilled approximately
two miles north of Breaker's highly successful first Fireweed multi-frac
Successfully treated with eight fracs in mid-March, the well flowed to
Breaker's compressor station since the morning of March 31, 2009. Field
measurements recorded that the well flowed at an average rate totalling
approximately 1,003 boe/d (which includes approximately 5.3 mmcf/d of natural
gas and approximately 120 bbls/d of natural gas liquids) for the last 24 hours
of the test ending the morning of April 3, 2009. The quoted gas rates are
measured raw at the wellhead and include approximately three percent carbon
dioxide and 2.5 percent hydrogen sulphide. This well was drilled in the north
end of the property where wells historically produced at lower rates. Breaker
is pleased with the results, as the well has also confirmed gas saturation in
previously untested sands.
After two months of high-rate production, Breaker's first horizontal
multi-frac well at Fireweed continues to produce at high rates. In only two
months, the well produced approximately 77.6 mboe of cumulative production and
exited March with a raw production rate of approximately 1,000 boe/d. Breaker
notes that this well's decline rate has started to flatten which is consistent
with the Company's interpretation that the well has tapped into a large
resource. From its field production estimates and internal benchmarking
studies based on public production data, Breaker believes that this well's
first-month daily average production of approximately 1,540 boe/d is superior
to all known horizontal wells in analogous deep basin Montney reservoirs. This
benchmarking data set includes 181 producing horizontal wells drilled since
January 2006 with public production data available up to year-end 2008.
Both horizontal wells measured initial bottom hole pressures exceeding 16
MPa at a true vertical depth of approximately 1,645 metres, indicating only a
small amount of drainage to date from legacy production of over 20 vertical
wells and cumulative production to date of over 17 bcf.
With Breaker's facility modifications essentially complete, the Company
anticipates total production rates from the Fireweed property of approximately
2,500 boe/d early in April, nearly triple the production rate when Breaker
acquired the property less than one year ago. Due to the high pressure and
flow rates of Breaker's two new horizontal wells, much of Breaker's
pre-existing Fireweed production of approximately 750 boe/d will continue to
be curtailed pending completion of the pipeline gathering system looping
project planned for the second half of 2009. This project will further enhance
the production capability from all wells and accommodate growing volumes in
In addition to the value of the natural gas liquids produced at Fireweed,
the high heat content of the gas enables Breaker's Fireweed gas production to
obtain a significantly higher sales price per mcf than typical dry gas.
This ongoing success confirms the potential of the Fireweed high rate,
liquids rich resource play. Currently, Breaker has identified 14 additional
drilling locations at Fireweed and the Company's total horizontal multi-frac
resource play inventory is now approximately 160 potential new locations. The
resource play areas include Fireweed, Irricana light oil, and Provost sweet
Breaker has started to take advantage of the Alberta Government's new
royalty incentive programs in other areas. Breaker delayed the tie-in of more
than one mmcf/d until April in its greater East Prairie area to ensure an
initial crown royalty rate of five percent and will spud a well in its
Medicine Hat area in early April to obtain both the drilling depth royalty
credit and the five percent initial royalty rate. Breaker has obtained cost
savings in all recent projects compared with prior quarters and remains
focused on finding further operational efficiencies.
The Company will continue to be flexible in its capital spending in order
to respond to changes in royalties, commodity prices, costs and capital
markets. Breaker has a large portfolio of low risk light oil and natural gas
drilling locations with spacing approvals in hand. The Company's current
production mix (which includes a significant liquids weighting, including a
large amount of light oil) allows for high netbacks and significant cash flow
at current commodity prices.
Breaker Energy Ltd. is a junior oil and gas company focused on creating
shareholder value by growing per share production and reserves through
acquisitions and a focused exploration, development and exploitation plan.
Breaker trades on the TSX under the symbol WAV.
Breaker has 46.0 million Class A Shares and 4.0 million Options
outstanding as at April 6, 2009.
This press release contains forward-looking statements concerning
anticipated: (i) capital expenditures for 2009, (ii) exploration and
development activities, (iii) production at Fireweed, (iv) gathering system
modifications, and (v) effects on Breaker of the Alberta Royalty Regime.
Although Breaker believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue reliance should
not be placed on the forward-looking statements because Breaker can give no
assurance that they will prove to be correct. Since forward-looking statements
address future events and conditions, by their very nature they involve
inherent risks and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks. These
include, but are not limited to, risks associated with the oil and gas
industry in general (e.g., operational risks in development, exploration and
production; delays or changes in plans with respect to exploration or
development projects or capital expenditures; the uncertainty of reserve
estimates; the uncertainty of estimates and projections relating to
production, costs and expenses, and health, safety and environmental risks),
commodity price and exchange rate fluctuations and uncertainties resulting
from potential delays or changes in plans with respect to exploration or
development projects or capital expenditures. Certain of these risks are set
out in more detail in Breaker's Annual Information Form which has been filed
on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this press release are made
as of the date hereof and Breaker undertakes no obligation to update publicly
or revise any forward-looking statements or information, whether as a result
of new information, future events or otherwise, unless so required by
applicable securities laws.
Note: Boe means barrel of oil equivalent on the basis of 1 boe to 6,000
cubic feet of natural gas. Boes may be misleading, particularly if used in
isolation. A boe conversion ratio of 1 boe for 6,000 cubic feet of natural gas
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead.
Boe/d means barrel of oil equivalent per day.
In this press release: (i) boe/d means boe per day, (ii) mcf means
thousand cubic feet, (iii) mmcf means million cubic feet, (iv) mmcf/d means
million cubic feet per day, (v) bbls means barrels of oil, (vi) bbls/d means
barrels per day, (vii) mboe means thousand barrels of oil equivalent (viii)
MPa means million pascals, and (ix) bcf means billion cubic feet.
The TSX does not accept responsibility for the adequacy or accuracy of
For further information:
For further information: Dan O'Neil, President & Chief Executive
Officer, (403) 215-5264; or Max Lof, Vice President, Finance & Chief Financial
Officer, (403) 215-5264, firstname.lastname@example.org, www.breakerenergy.com