CALGARY, ALBERTA--(Marketwire - Feb. 29, 2012) - Open Range Energy Corp. (TSX:ONR.TO - News) ("Open Range" or the "Company") is pleased to announce it has achieved an average 24-hour test rate up 2 7/8" tubing of approximately 1,350 barrels of new light oil per day on its first Montney horizontal well at Waskahigan.
-- After spudding on January 3 and being drilled to a total measured depth
of 4,140 metres, the 100 percent Open Range 13-24-63-23-W5M well
underwent hydraulic fracturing on February 11-12 over 14 stages using a
packer system and gelled hydrocarbon fluid, with approximately 290
tonnes of proppant placed (approximately 21 tonnes per stage);
-- The well commenced clean-up flow on February 13 and recovered all 5,600
barrels of load fluid in the first 60.5 hours of an 82-hour test up
-- In the test's remaining 21.5 hours the well produced 1,615 barrels of
new 41 degrees API oil, representing a rate of approximately 1,825
barrels of oil per day, with flowing casing pressure of approximately
2,920 kPa (425 psi). The well also produced liquids-rich natural gas at
a rate of approximately 1.75 mmscf per day (including 15 percent
-- Following the test up casing, the well was shut in, 2 7/8" tubing was
set and commencing on February 27 the well had an initial rate of 2,038
barrels of new oil per day, plus approximately 2 mmscf per day of
liquids-rich solution gas, for an all-in initial rate of 2,371 boe per
day, at tubing pressure of 3,370 kPa (490 psi). Over 24 hours the well
produced 1,350 barrels of new oil, and the well continues to flow;
-- Construction is underway on an oil battery with three, 1,000-barrel
tanks, and on a solution gas pipeline to be tied into a third-party
facility, with processing capacity contracted. The Company anticipates
completing the battery and pipeline by mid-March at a combined estimated
cost of $1.5 million. The scalable oil battery is expected to serve up
to three additional wells from the pad site;
-- All-in costs to drill, complete, equip and tie-in this first well in the
Company's multi-well program are estimated at approximately $6 million;
-- Montney oil production at Waskahigan is anticipated to generate a
netback of approximately $50 per boe; and
-- In the coming days the well will enter a planned shut-in period of
approximately two to three weeks to complete surface facilities and
gather reservoir data. Open Range intends to bring the well on-
production immediately thereafter.
"This excellent result crystallizes Open Range's plan for implementing its light oil program, sets up some very attractive offset wells in the second half of the year, and begins to move us towards higher corporate netbacks," said Gerald Costigan, Open Range's Executive VP. "This first well also demonstrates Open Range's ability to execute a horizontal oil development in a new area in a timely manner, including establishing critical infrastructure, laying the foundation for a de-risked, multi-well Montney light oil program."
Open Range's 2012 capital program includes drilling and completing three further Montney wells at the Company's 100 percent working interest Waskahigan play before year-end. The Company has a current inventory of over 20 net additional Montney locations on its acreage.
OPEN RANGE ENERGY CORP. IS A PUBLICLY TRADED CANADIAN ENERGY COMPANY WITH FOCUSED OPERATIONS IN THE DEEP BASIN REGION OF ALBERTA.
OPEN RANGE HAS APPROXIMATELY 74.7 MILLION COMMON SHARES ISSUED AND OUTSTANDING, WHICH TRADE ON THE TSX UNDER THE SYMBOL "ONR".
For further information, please refer to the Company's website at www.openrangeenergy.com.
This news release contains certain forward-looking statements, which include assumptions with respect to (i) results from drilling and completion operations; (ii) production; (iii) future capital expenditures and operating activities and how they will be financed; (iv) funds from operations; (v) cash flow from operations; and (vi) general oil and gas industry activity. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, operating risk liability, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities.
Open Range's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Additional information on the foregoing risks and other factors that could affect Open Range's operations and financial results are included in the Company's annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.