TRADING SYMBOL - GRT
/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE
CALGARY, Nov. 23 /CNW/ - G2 Resources Inc. ("G2") (TSXV - "GRT") is
pleased to provide an operational update.
At Luseland in southwestern Saskatchewan, G2 and its partner completed
and placed on production in July 2007 three oil wells that were drilled in the
second quarter 2007. Four more locations are currently being surveyed and G2
expects that two of these four wells will be drilled early in the first
quarter 2008. G2 has an average working interest of 49% in this project.
At Windfall, G2 has an interest in 5,760 acres of land, has negotiated a
farmin on an additional 9,820 acres, with access to 70 square miles of seismic
which covers these lands. The area has potential for Gething, Blueridge and
Nisku targets, and the terms of the farmin provide for a continuing option to
drill and earn the lands.
Subsequent to September 30, 2007, G2 drilled the first of a two well
program (102/3-36-59-16 W5M). The well was drilled to a total depth of
2,730 meters (9,088 feet) and encountered 13 meters (43 feet) of gas pay in
the Nisku zone. The well is currently waiting on completion and production
testing. G2 has a 33.3% working interest in this well.
The drilling rig has now been moved to 11-26-59-16 W5M where it has
commenced drilling a second well, also targeting the Nisku formation. G2 has a
38.3% working interest in this second well.
At Trutch in northeastern British Columbia, G2 will be participating in
the surveying and licensing of 4 locations to follow up on last winter's
drilling. The locations are all on the north side of Trutch Creek where the
northern extension to the pool was confirmed with the drilling of two wells
and the re-entry of 2 wells during the last drilling season. The final
decision on the drilling of these four wells will be made prior to year-end,
subject to gas prices and project economics. Current production from the
property is 4.2 mmscf/day (net - 0.95 mmscf/d).
The Company's oil, natural gas liquids and natural gas production
averaged 475 boe per day during the three months ended September 30, 2007,
comprised of 123 barrels per day of crude oil, 37 barrels per day of natural
gas liquids and 1.9 mmcf per day of natural gas.
In compiling its financial results for the period ended September 30,
2007, management completed a review of the Company's oil and natural gas
reserves and determined that reserves previously assigned to the proved
undeveloped classification for certain of the Company's natural gas properties
are not economic on the basis of current commodity price forecasts being used
by the Company's third party engineering evaluators. Low natural gas price
forecasts have negatively impacted the Company's net present value for its
major natural gas properties by 52%. This devaluation in the Company's reserve
assessment has resulted in a depletion charge of $24.1 million as a result of
ceiling test impairment. The Company believes that gas prices will rebound, at
which time the proved undeveloped reserves can be exploited and re-instated,
resulting in a recovery of the commercial value of its natural gas producing
properties. Additional information on G2's financial results for the third
quarter is being filed today with Canadian securities regulatory authorities
and is available at www.sedar.com.
Per barrel of oil equivalent ("boe") amounts may be misleading,
particularly if used in isolation. A boe conversion ratio has been calculated
using a conversion rate of six thousand cubic feet of natural gas to one
barrel of oil (6 Mcf:1 bbl) and is based on an energy equivalency conversion
method applicable at the burner tip and does not represent a value equivalency
at the wellhead.
This press release may contain forward-looking statements including
expectations of future production, cash flow and earnings. These statements
are based on current expectations that involve a number of risks and
uncertainties, which could cause actual results to differ from those
anticipated. These risks include, but are not limited to: the risks associated
with the oil and gas industry (e.g. operational risks in development,
exploration and production, delays or changes to plans with respect to
exploration or development projects or capital expenditures or availability of
drilling equipment; the uncertainty of reserve estimates; the uncertainty of
estimates and projects relating to production, costs and expenses;
environmental risks; and the uncertainty associated with dealing with
governments and obtaining regulatory approvals), commodity price, price and
exchange rate fluctuation. Additional information on these and other factors
that could affect G2's operations or financial results are included in
management's discussion and analysis of G2's quarterly financial results filed
with Canadian securities regulatory authorities that may be accessed at
The TSX Venture Exchange Inc. does not accept responsibility for the
adequacy or accuracy of this release.
For further information:
For further information: Curtis A. Hartzler, President and CEO, G2
Resources Inc., Phone (403) 263-4310, Fax No. (403) 263-4368