New Woodrush 3D Seismic Interpretation Drives High Impact Q4-2017 DXI Drill Program
Data Profiles Multiple Additional Halfway Oil and Gething Gas Targets
Vancouver, British Columbia--(Newsfile Corp. - September 14, 2017) - DXI Energy Inc. (TSX: DXI) (OTCQB: DXIEF) is pleased to announce receipt of new 2D and 3D seismic interpretation related to the Company's Woodrush Project in NE British Columbia. This new seismic interpretation using high resolution Sensor Geophysical (SG) data has identified numerous Halfway targets similar in amplitude and depth but believed to be much larger in areal extent to the existing Woodrush oil pool. This new 3D interpretation encompasses approximately 6,000 of the 14,000 acres owned and operated by DXI.
"The first target lays adjacent to our existing Woodrush oil production where seismic indicates an average 16'+ thick amplitude. DXI has an existing drill pad that can be modified to drill and complete into production the first of several wells at an expected all in cost of ~C$2 per additional barrel of oil. Given current netbacks of ~C$30 per barrel of oil and the potential oil recovery of 2.6 million barrels (50% recovery factor), this low risk, high netback drill program is an innovative, constructive approach to the Company's Q4 2017 expansion plans," states Robert L. Hodgkinson, Chairman & CEO.
Woodrush Project: Legacy Operations
On a historical basis, initial wells at the oilfield drilled in 2008 and 2010 each commenced production at rates in excess of 500-700 BOPD of light 42' gravity crude, have produced over 675,000 barrels of oil since discovery and were still producing at a daily combined rate of 300 BOED through Q2 2017. The current infrastructure consists of tanks, separators, line heaters, compressors, pumps, water injection facilities and pipelines and was built at a cost of ~C$12mm with a production capacity of ~2,000 BO/day and up to 5 MMCF gas/day. New discoveries in this location would utilize existing in-place infrastructure and transportation systems to market new production in a similar cost effective manner.
Q4 2017 Woodrush Drill Program
DXI's operations team is currently organizing the drill program to commence in Q4 2017. Drill time for the initial well is anticipated to take 7 days with completion into tanks in about 30 days. The Company is currently compiling bids and expects the at-risk portion of the first well to be less than $600k with total completed well costs to be discounted reflecting the significantly reduced level of today's drilling activity in the Peace River Arch region. Given success of the first well, a new road and pad would immediately be built to host an additional 2-3 wells depending on configuration. Timing would be accelerated to have additional wells drilled and related infrastructure in place prior to spring break up. Completion of those wells into tanks would follow.
Outlook & Monetization Strategy
DXI intends to expand production volumes, reserve life & value and develop sustainable cash flows to support its growth strategy at Woodrush. By successfully ramping oil output from this first 260-acre drill target, the Company could maximize the use of all in place facilities and extend, on a highly economic basis, the production life of the Woodrush Project significantly. Should an expanded program yield additional successful targets as anticipated, Woodrush would benefit from a multiplier effect across all key financial metrics and present DXI with highly attractive expansion or monetization alternatives.
About DXI Energy Inc.:
DXI Energy Inc. is an upstream oil and natural gas exploration and production company with producing projects in Colorado's Piceance Basin (25,684 net acres) and the Peace River Arch region in British Columbia (12,224 net acres). DXI Energy Inc. maintains offices in Calgary and Vancouver, Canada. The Company is currently publicly traded on the OTCQB (DXIEF) and Toronto Stock Exchange (DXI.TO).
Statements Regarding Forward-Looking Information: This news release contains statements about oil and gas production and operating activities that may constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities legislation as they involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by DXI Energy and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting engineering and geologic data, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the exploration and development of oil and gas properties.
Additional information on these and other factors, which could affect DXI Energy Inc.'s operations or financial results, are included in DXI Energy Inc.'s reports on file with Canadian and United States securities regulatory authorities. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law.
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Contact:
DXI Energy Inc.:
Robert L. Hodgkinson
Chairman & CEO
604-638-5055
investor@dxienergy.com
Craig Allison
Investor Relations-New York
914-882-0960
callison@dxienergy.com
