Petro-Reef Announces Production Update
07 Julio 2011 - 11:34AM
Marketwired Canada
Petro-Reef Resources Ltd. (TSX VENTURE:PER) has recently completed and fractured
the 102/10-7-56-26W4 well in the Alexander sand zone. In 6.7 hours of swabbing
operations (after recovering 100% of the load fluid) the well produced at an
average rate of 294 barrels per day of 32 degrees API sweet oil and 213 mcf per
day of natural gas or approximately 329 barrels of oil equivalent per day. The
Company expects the well to produce at an initial rate of 118 boe/day consisting
of 89 bbl/day of oil (70 bbl/day net) and 177 mcf/day of gas (140 mcf/day net).
Petro-Reef has a 79-per-cent working interest in the 10-7 well.
The 102/10-07 well is a follow-up to the discovery well at 11-07-56-26W4 which
produced 5,414 barrels of oil in 212 days from this same zone before being
shut-in, in favour of producing oil from the Detrital oil zone. The Alexander
Sand is the second oil producing zone in Section 7-56-26W4. Three existing wells
at 11-07-56-26W4, 13-07-56-26W4 and 06-07-56-26W4 are all completed in the
Detrital oil zone and all three wells also contain the same Alexander Sand, as
identified on well logs. All three locations are good candidates for additional
vertical wells, targeting oil in the Alexander sand. In addition, a fourth
un-drilled location has been identified on the same lands that is prospective
for the Alexander sand.
Petro-Reef is presently producing 726 boe/day consisting of 174 bbl/day of oil &
ngl and 3,311 mcf/day of natural gas. This total includes the two new wells at
2-1-56-27W4 and 8-7-56-26W4 brought on-stream in the past 30 days.
The 2-1 well was perforated and fractured in the Calahoo zone and is producing
an average of 45 barrels per day (bbl/d) of oil and 160 mcf per day of natural
gas. Petro-Reef has a 94-per-cent working interest in the 2-1 well.
The 8-7 is producing as a gas well at a rate of 467 mcf per day from the Lower
Detrital zone. Petro-Reef has a 100 per-cent working interest in the 8-7 well.
Petro-Reef anticipates its daily production rates will increase to over 1,100
boe/day (40% Oil & NGL) with new wells being tied-in and brought on-stream in
August, 2011, and GPP (Good Production Practices) production restrictions on
6-7-56-26W4 and 11-7-56-26W4 being lifted in late July, 2011.
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Oil & NGL) Natural gas) Total (boe/day)
(bbl/day (mcf/day
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Current net production 174 3,311 726
Tie-in 13-7-56-26W4 65 300 115
Tie-in 102/10-7-56- 70 140 93
26W4
GPP restriction lifted 150 450 225
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Total net production 459 4,201 1,159
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40% 60% 100%
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The previously announced 13-7-56-26W4 well was perforated and fractured in the
Detrital zone and on a 40-hour test produced an average of 127 bbl/d of oil and
1,366 mcf per day of natural gas. The Company expects the well to produce at an
initial rate of 146 boe/day consisting of 82 bbl/day of oil (65 bbl/day net) and
378 mcf/day of gas (300 mcf/day net). Petro-Reef has a 79-per-cent working
interest in the 13-7 well.
In late April, 2011 the ERCB (Energy Resources Conservation Board) notified the
Company that production rates at 6-7-56-26W4 and 11-7-56-26W4 would be
restricted until a GPP application is approved. The application was submitted to
the ERCB on May 19, 2011 and approval is expected in the next two to three
weeks.
Also, Petro-Reef has licensed a well at 9-12-56-27W4M targeting the Detrital oil
zone, and has received oil down-spacing approval from 160 acre to 80 acre
spacing for the Lower Mannville oil zones on east half of section 12 -56-27W4M.
The 9-12 well is expected to be drilled and completed in the next two months.
The term barrel of oil equivalent may be misleading, particularly if used in
isolation. A boe conversion ratio of 6,000 cubic feet per barrel of natural gas
to barrels of oil equivalence is based on an energy equivalency conversion
method primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead. All boe conversions in the report are derived from
converting gas to oil in the ratio mix of 6,000 cubic feet of gas to one barrel
of oil.
Forward-Looking Statements: All statements, other than statements of historical
fact, set forth in this news release, including without Limitation, assumptions
and statements regarding reservoirs, resources and reserves, future production
rates, exploration and development results, financial results, and future plans,
operations and objectives of the Corporation are forward-looking statements that
involve substantial known and unknown risks and uncertainties. Some of these
risks and uncertainties are beyond management's control, including but not
limited to, the impact of general economic conditions, industry conditions,
fluctuation of commodity prices, fluctuation of foreign exchange rates,
environmental risks, industry competition, availability of qualified personnel
and management, availability of materials, equipment and third party services,
stock market volatility, timely and cost effective access to sufficient capital
from internal and external sources. The reader is cautioned that assumptions
used in the preparation of such information, although considered reasonable by
the Corporation at the time of preparation, may prove to be incorrect. There can
be no assurance that such statements will prove to be accurate and actual
results and future events could differ materially from those anticipated in such
statements.
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