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CALGARY, Sept. 4, 2014 /CNW/ - Journey Energy Inc. (JOY – TSX) ("Journey" or the "Company") is pleased to provide an update on the extended test results for a new pool discovery at Windfall.
As planned, Journey is currently executing the most active capital program in our history with multiple well programs in Matziwin, Herronton, Pembina and Countess along with single well drills in Manola and Windfall. This program has resulted in a 100% success rate and is forecasted to result in record exit production in excess of 11,200 boe/d.
Journey Windfall 10-10-60-14W5 (100% WI) horizontal well was completed over 18 intervals in the Beaverhill Lake formation and production tested from August 9th to 22nd inclusive. During the 302 hour extended test, the well produced 5,416 bbl of 44o API oil and 30.6 mmscf of raw gas. Final flow rates for the last 24 hours of the test were 320 bbl/d of oil, 2.0 mmscf/d of raw gas, and 250 bbl/d of water at a flowing pressure of 300 psi. The produced raw gas was liquids rich and recoveries of approximately 50 bbls of natural gas liquids (NGL's) per mmscf of raw gas were calculated from the gas analysis. If processed through a facility, this test rate equates to approximately 700 boe/d (60% oil and NGL's).
Water cuts followed a declining trend and decreased throughout the test from 100% to a final water cut of 44%. The gas analysis showed 2.4% CO2 and 0.9% H2S. Given the H2S concentration and the lack of acid gas processing on the north side of the Athabasca River, Journey is currently reviewing natural gas tie-in options for the well and a long term development plan for the resource. As a result, the Windfall well is not included in our 2014 or 2015 production guidance. Further capital requirements and added production volumes for Windfall will be determined once the development plan is complete, and will be incremental to our 2015 guidance.
Drilling of the 10-10 well will earn and validate 22 sections of land (100% WI) and the pool is thought to extend over the majority of these sections. This play represents a potentially significant productive resource for the Company, and there are no reserves currently attributed to the Windfall pool in Journey's 2013 year end reserve report. The Windfall well cost $4.4 million to drill and complete. We expect to see reductions in drilling and completion costs with larger drilling programs as the field is developed.
Journey's production volumes from recently drilled wells have exceeded budgeted rates and we are in a position to meet our exit guidance of 11,200 boe/d without Windfall. August production was in excess of 11,000 boe/d from field receipts, and Journey continues to add new production over and above declines. Production guidance for Q3 remains on track at 10,600 boe/d.
Please visit our website at www.journeyenergy.ca for the most recent corporate presentation. We look forward to providing further details on our 2015 guidance in the fourth quarter.
About the Company
Journey is a Canadian exploration and production company focused on conventional, oil-weighted operations in western Canada. Journey's strategy is to become a growth plus sustainable yield company focused on drilling on its existing core lands, implementing water flood projects, executing on accretive acquisitions and growing its production base. Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods.
This press release is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia) or any other jurisdiction outside Canada. This press release does not constitute or form a part of any offer or solicitation to buy or sell any securities in the United States or any other jurisdiction outside of Canada. The common shares have not been and will not be registered under the United States Securities Act of 1933, as amended, (the "U.S. Securities Act") or the securities laws of any state of the United States and may not be offered or sold within the United States other than pursuant to an available exemption from the registration requirements of the U.S. Securities Act and applicable state securities laws. There will be no public offer of the common shares in the United States.
Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, which involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Journey, including, without limitation, those listed under "Risk Factors" and "Forward-Looking Statements" in the final long form prospectus of Journey dated June 12, 2014 (the "Prospectus"). Forward-looking information may relate to our future outlook and anticipated events or results and may include statements regarding the business strategy and plans and objectives. Particularly, forward-looking information in this press release includes, but is not limited to, information concerning Journey's dividend policy, long-term objectives and the declaration and payment of dividends. Journey cautions investors in Journey's securities about important factors that could cause Journey's actual results to differ materially from those projected in any forward-looking statements included in this press release. Forward-looking information contained in this press release is based on our current estimates, expectations and projections, which we believe are reasonable as of the current date. No assurance can be given that the expectations set out in the Prospectus or herein will prove to be correct and accordingly, you should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as required by applicable securities law.
No securities regulatory authority has either approved or disapproved of the contents of this press release.
SOURCE: Journey Energy Inc.