CALGARY, ALBERTA--(Marketwired - Nov. 25, 2013) - PRD Energy Inc. ("PRD" or the "Company") (TSX VENTURE:PRD) has completed drilling and logging operations at the Boerger well in Germany. Highlights of the results to date include:
- 485 meters of horizontal length drilled in the targeted Jurassic Obermalm 1 zone in which oil and gas shows were seen throughout and assumptions regarding reservoir pressure confirmed;
- the well has been cased with sleeves for approximately 200 meters with the remainder of the horizontal section being open hole;
- the targeted Obermalm 1 formation is a highly fractured dolomitic sandstone interbedded with shales and anhydrites with a history of offset production; and
- confirmation of the Company's view that the Northwest German basin contains attractive geologic and economic opportunities.
The costs for the drilling, completion and construction of surface facilities is estimated to be approximately CAD $9.25 million, of which approximately CAD $6.0 million has been incurred as at September 30, 2013. As at September 30, 2013, the Company had approximately CAD $5.3 million of working capital which will be used to fund the estimated CAD $3.25 million necessary to complete the project. The primary causes of the cost overruns are attributed to performance of the drilling rig, drilling procedures and mechanical difficulties encountered during operations.
In the Northwest German Basin, oil deposits typically reside at depths much shallower than the gas deposits on which the majority of recent industry activity has focused for development. The Boerger well is one of a limited number of horizontal wells which have targeted oil in this basin resulting in a set of operating conditions where limited industry experience was available to the Company and its partner and service providers. The Company's experiences have highlighted several key areas of focus including; rig performance criteria, mud chemistry and bit selection. As a result, the Company has undertaken a full review of the operations to date and is working with its service providers to achieve better outcomes regarding equipment selection, performance improvements and greater certainty surrounding timing and costs which the Company can apply to future operations in this basin.
The Company is confident that the application of modern conventional technology, combined with operational improvements will unlock the potential of this basin.
The drilling rig is being demobilized following which the well will be production tested with preliminary results expected during January, 2014. The Company continues to high grade its land and develop drilling locations and plans to drill several wells in Germany during 2014.
About PRD Energy
PRD Energy Inc. is a Calgary based oil and gas company engaged in the exploration, development and acquisition of, natural gas and crude oil in Germany. PRD's common shares are listed on the TSX Venture Exchange with the symbol "PRD". All activities of the Company in Germany are undertaken by its wholly-owned subsidiary, PRD Energy GmbH.
This news release contains forward-looking information relating the anticipated costs to complete the Boerger well, expectations related to the timing for the demobilization of the drilling rig, the timing of bringing the Boerger well onto production, the successful implementation of conventional technology and operational improvements to improve the timing and costs associated with drilling in Germany, future drilling plans in 2014 and other statements that are not historical facts. Such forward-looking information is subject to important risks, uncertainties and assumptions. The results or events predicated in this forward-looking information may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on this forward-looking information.
Forward-looking information is based on certain factors and assumptions regarding, among other things, the costs incurred as of September 30, 2013 in drilling the Boerger well, the availability of working capital to fund the completion of the Boerger well, the impact of increasing competition; the general stability of the economic and political environments in which the Company operates or owns interests; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability to operate in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; the timing and costs of facility construction; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company to successfully market its oil and natural gas products, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward looking-information is subject to certain factors, including risks and uncertainties that could cause actual results to differ materially from what is currently expected. These factors include risks associated with currency fluctuations, unforeseen operational impediments and the costs associated therewith, instability of the economic and political environments in which the Company operates or owns interests, oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, reliance on key personnel, regulatory risks and delays, including risks relating to the acquisition of necessary licenses and permits, environmental risks and insurance risks.
You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While the Company may elect to, the Company is under no obligation and does not undertake to update this information at any particular time, except as required by law.
Neither the 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.
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Chairman and Chief Executive Officer
PRD Energy Inc.
President and Chief Operating Officer
PRD Energy Inc.
Vice President, Finance