CALGARY, ALBERTA--(Marketwired - May 16, 2013) - Thunderbird Energy Corp. (TSX VENTURE:TBD)(TBDYF) (the "Company") today announced a number of corporate updates.
Gordon Creek Operations
The eight newly drilled wells that were completed at the Company's Gordon Creek natural gas field located in Carbon County, Utah are continuing to de-water. All of the eight wells were drilled in the North-west corner of the Company's Gordon Creek acreage. It appears that the thicker than expected sandstone pay zones and higher than expected porosities encountered in this area of the project are contributing to higher than expected initial water inflows, leading to longer than expected de-watering periods. The Company's original expectation for these eight new wells - based on the analog wells producing at the adjacent Drunkard's Wash field - was a first year average initial production rate of 460 Mcf/day per well, with ultimately recoverable reserves of 2.0 Bcf over the life of the well. The Company remains optimistic that the new wells will, on average, ultimately meet or exceed these expectations, but it will be some time before sufficient de-watering has occurred in order to make that assessment. The Gordon Creek wells have all been equipped with long terms pumps capable of pumping between 300-500 barrels of water per day, which should provide sufficient capacity once the initial de-watering phase has been completed. However, these pumping rates have not been sufficient to reduce the water levels in the well bores that result from the early stage inflows. The hydrostatic pressure associated with these high water levels would appear to be impeding gas production. Gas production from seven of the eight wells has ranged from 1.0-2.0 Mcf/day to 15-20 Mcf/day. The Company is currently sourcing alternative high capacity water pumping systems that could be temporarily installed on certain wells in order to accelerate the initial de-watering process.
One of the eight new wells (NE5-14-8) contributed the bulk of the new production announced in December 2012, producing up to 4.0 Mmcf/day prior to significant initial water inflows and without installing production tubing and pumping equipment. Production rates declined over the ensuing three to four months to roughly 1.0 Mmcf/day and workover operations were conducted in March-April this year in order to clean out residual frac sands and coal fines, to remove bridge plugs that were placed in the well during the fracture stimulation operations and to equip the well with production tubing and a water pump. Following removal of the bridge plugs, water inflows from lower zones substantially curtailed production from the well, so the decision was made to re-install the plugs in order to isolate production from the upper zone only. Gas production from this well continues a steady incline and has averaged approximately 600-700 Mcf/day over the last couple of weeks. The Company continues to closely monitor production from this well in order determine if alternative completion protocols could be adopted in other wells with these reservoir characteristics in order to maximize early stage productivity.
Reference is made to the most recent presentation on the Company's web site www.thunderbirdenergy.com, that contains slides depicting the production histories of early stage "low gas - high water" rate wells at the neighboring Drunkard's Wash field.
Cumulative gas production from the four "legacy" Gordon Creek wells that were drilled in 2002 has remained relatively steady at roughly 1.1 Mmcf/day.
GLJ Petroleum Consultants are currently finalizing the 2013 evaluation of the Company's Gordon Creek natural gas reserves in accordance with National Instrument (NI) 51-101. This will be completed prior to the end of May, at which time the appropriate filings will be made on SEDAR.
Annual General Meeting
The Company's 2013 annual general and special meeting ("AGM") has been scheduled for June 12, 2013 in Vancouver. At that meeting, the shareholders will be asked to consider a resolution whereby the Company's issued and outstanding shares will be consolidated on the basis of fifteen (15) pre-consolidation common shares for each one (1) post-consolidation common share (the "Consolidation"). The Board believes that it is necessary to reduce the number of common shares outstanding so as to enhance the liquidity of the shares as well as the marketability for the shares in the institutional investment community in order to secure additional financing. Additional financing will be required before the Company can pursue further completion and drilling operations at Gordon Creek. The Consolidation is also intended to assist the Company's efforts to pursue a dual listing of the Company's shares on a U.S. stock exchange, although no assurances can be given that the Company will be successful in achieving a listing of its securities on a U.S. exchange.
If approved, the Consolidation would reduce the Company's 106,645,576 issued and outstanding Common Shares to approximately 7,109,705 Common Shares. The exercise price of outstanding stock options and warrants would be proportionately adjusted based upon the consolidation ratio. The proposed Consolidation is subject to the approval of the TSX Venture Exchange and the Company's shareholders.
In conjunction with the Consolidation, shareholders will also be asked to approve a change of the Company's name (the "Name Change") to "Gordon Creek Energy Inc." or such other name as may be approved by the directors of the Company, the TSX Venture Exchange and the Director under the Canada Business Corporations Act. The Board feels that the proposed new name will more accurately depict the Company's focus on the North American energy sector and in particular, the Company's operations in the US Rockies.
At the AGM, shareholders will also be asked to confirm the adoption of an advance notice by-law (the "By-Law) as approved by the Company's directors at a meeting held May 10, 2013. Among other things, the By-Law includes a provision that requires advance notice to the Company in circumstances where nominations of persons for election to the Board of Directors are made by shareholders of the Company other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the Canada Business Corporations Act (the "Act"); or (ii) a shareholder proposal made pursuant to the provisions of the Act. The Bylaw fixes a deadline by which holders of record of common shares of the Company must submit director nominations to the Company prior to any annual or special meeting of shareholders and sets forth the information that a shareholder must include in the notice to the Company. The Bylaw is effective as of the date it was adopted until the next ensuing meeting of shareholders of the Company and, thereafter, if the Bylaw is confirmed by the shareholders at such meeting.
Full details regarding the proposed Consolidation, Name Change and the adoption of the By-Law are included in the management proxy circular prepared in connection with the AGM that will be mailed on May 16, 2013 to all shareholders of record as of May 8, 2013, and will be posted on SEDAR at www.sedar.com. The full text of the By-law will also available on SEDAR at www.sedar.com, or upon request by contacting the Company at 604-707-0373 or by e-mail at email@example.com.
Thunderbird Energy is a Canadian-based oil and gas exploration and production Company with interests in the US Rockies and mid-continent regions.
Caution Regarding Forward- looking information
Information in this news release respecting anticipated petroleum and natural gas production and reserves, as well as the Company's proposed development operations and contractual commitments constitutes forward-looking information. Information in the news release concerning the liquidity, marketability and listing of the Company's share capital on North American stock exchanges also constitutes forward-looking information. Statements containing forward-looking information express, as at the date of this news release, the Company's plans, expectations, or beliefs as to future events or results are believed to be reasonable based on the information currently available to the Company. The Company does not undertake to update any such forward-looking statements unless required by applicable securities legislation.
Statements including forward-looking information involve known and unknown risks, uncertainties and other factors which may cause the actual results of the Company and its operations to be materially different from estimated costs or results expressed or implied by such forward-looking statements.
There can be no assurance that forward-looking statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. Readers should not place undue reliance on forward-looking information.