- On Track to Achieve Forecast Production Increases -
DALLAS, Sept. 12, 2012 /CNW Telbec/ - Gale Force Petroleum Inc. (TSXV: GFP) (OTCQX: GFPMF) (the "Company" or "Gale Force") today reported results from its liquids-rich Marcellus shale gas properties (the "Marcellus Properties"), located in Wetzel and Marshall Counties, West Virginia.
Several wells at the Marcellus Properties are now completed, tied-in and on production. Current net production to the Company's interests in the Marcellus Properties is in excess of 60 BOEPD of liquids-rich natural gas production, and production levels are expected to increase as additional wells are brought on production. The Company is now producing over 460 BOEPD.
"The Marcellus Properties investment has yielded another substantial increase in net petroleum production and profits for Gale Force", said Michael McLellan, Co-Chairman & CEO. "We have achieved over 60BOEPD net production from investments to date totalling $600,000, with additional wells coming online."
The Company will be investing another $600,000 this week in the Marcellus Properties, for the purpose of drilling, completing and tying in several additional wells. This is on top of a $600,000 investment made by the Company in January earlier this year.
The Marcellus Properties consist of approximately 10,000 acres, operated by a major, public oil and gas company with favourable service contracts. The properties are in the "wet gas" window of the Marcellus shale gas field, with prolific natural gas liquids and condensate in addition to abundant natural gas.
To date over 15 wells have been drilled on the Marcellus Properties and between 50 and 100 additional new wells are expected to be drilled and completed on similar spacing to the existing 15 wells within the next 3 years.
The Company purchased working interests (WIs) in various existing wells and the rights to participate in any of the up to 100 additional wells expected to be drilled on the Marcellus Properties. As per the terms of the investment, the Company earns payout of its initial investment plus an internal rate of return (IRR) of 35%, prior to its WIs being reduced by approximately 40%. The Company owns WIs including a 1.275% WI in numerous producing wells, a 0.255% WI in several wells drilled prior to its investment, and the Company has the rights to participate in the drilling of up to 100 wells throughout the acreage for a minimum of 1.125% WI in each new well until it earns payout plus an IRR of 25%, after which its interests in each well decreases by 50%.
ABOUT GALE FORCE PETROLEUM INC. − www.GaleForcePetroleum.com
Gale Force Petroleum is a public corporation focused on acquiring and exploiting underdeveloped and undervalued oil and gas reserves in mature basins, bringing operational expertise and capital to lower-risk, development-type projects. The Company currently owns producing oil and gas properties in Texas, Oklahoma, Tennessee and West Virginia.
Cautionary statement concerning use of BOEs:
Please note that the Company has used the term "BOE" herein, which 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.
"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."
SOURCE: GALE FORCE PETROLEUM INC.
For further information:
Michael McLellan, CFA, Co-Chairman & CEO, +1.514.221.2030