DeeThree Exploration Ltd. [stock dtx.to] is pleased to announce it has reached its targeted 2012 exit production rate of 6,000 boe/d based on field estimates. In addition, DeeThree has recently drilled two wells that are expected to be producing by the end of 2012 or early 2013 at significant rates.
DeeThree is pleased to report it has entered into a farm-in agreement with a senior oil and gas producer pursuant to which it may earn a 100% working interest in up to 34 additional sections of Belly River petroleum and natural gas (“PNG”) rights directly offsetting DeeThree’s existing core Brazeau Belly River property. DeeThree has committed to drill a minimum three horizontal wells on the farm-in lands with a continuing rolling option thereafter in return for a 15% non-convertible overriding royalty. A map of the farm-in lands may be viewed on DeeThree’s website at www.deethree.ca.
The Belly River zone in DeeThree’s existing Brazeau Belly River property and in the farm-in lands consists of a thick section with multiple stacked sweet hydrocarbon bearing sand intervals. DeeThree has successfully tested different Belly River intervals on its Brazeau Belly River property with horizontal and multi-stage fracing technology and has proved commercial productivity from four different Belly River intervals successfully moving them into the development stage. The focus by previous operators was primarily on the prolific Basal Belly River interval.
The three locations most recently drilled by DeeThree on its existing Brazeau Belly River property have focused on Upper Belly River intervals. The results of these wells have exceeded expectations. The table below highlights the results of these three wells.
|Well Identification||Average Test Rate
|End of Test Rate
|IP 30 (boe/d)||IP 90 (boe/d)||Current Rate (boe/d)|
(2.5 days) (71% Oil & NGL)
(72% Oil and NGL)
(5.5 months on production)
(5 days) (97% Oil & NGL)
(97% Oil and NGL)
(4 months on production)
(6 days) (84% Oil & NGL)
(78% Oil and NGL)
(1) Test rates are not necessarily indicative of long-term performance or of ultimate recovery.
As with DeeThree’s existing acreage, a significant portion of the farm-in lands have been developed with vertical wells into the Basal Belly River interval providing DeeThree with significant well control over its entire Brazeau Belly River land base. With DeeThree’s prospective Brazeau Belly River land base now totaling more than 70 net sections and the production results of the three most recent Upper Belly River wells, DeeThree has identified a significant increase to its already extensive light oil resource in its Brazeau Belly River core area. DeeThree plans to drill two step-out wells on the farm-in lands in the first quarter 2013 that will target the Upper Belly River interval.
In considering these significant additional opportunities DeeThree is currently reviewing its future capital expenditure budget and expects to release its 2013 guidance in mid-January, 2013. Management believes DeeThree has strong momentum for continued production growth in 2013.
For further information, please contact Martin Cheyne, President and Chief Executive Officer of DeeThree Exploration Ltd. by telephone at (403) 263-9130. Please see the latest corporate presentation at www.deethree.ca.
Forward-Looking Statements. Certain statements contained in this press release may constitute forward-looking statements. These statements relate to future events or the DeeThree’s future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. DeeThree believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon by investors. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement.
In particular, this press release contains forward-looking statements, pertaining to the following: projections of market prices and costs, supply and demand for oil and natural gas, the quantity of reserves, oil and natural gas production levels, capital expenditure programs, treatment under governmental regulatory and taxation regimes, expectations regarding DeeThree’s ability to raise capital and to continually add to reserves through acquisitions and development, and projections of market prices and costs.
With respect to forward-looking statements contained in this press release, DeeThree has made assumptions regarding, among other things: the legislative and regulatory environments of the jurisdictions where DeeThree carries on business or has operations, the impact of increasing competition, and DeeThree’s ability to obtain additional financing on satisfactory terms.
DeeThree’s actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors that may include, but are not limited to: volatility in the market prices for oil and natural gas; uncertainties associated with estimating reserves; uncertainties associated with DeeThree’s ability to obtain additional financing on satisfactory terms; geological, technical, drilling and processing problems; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; incorrect assessments of the value of acquisitions; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel.
This forward-looking information represents DeeThree’s views as of the date of this document and such information should not be relied upon as representing its views as of any date subsequent to the date of this document. DeeThree has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. . Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.
BOE Presentation. References herein to “boe” mean barrels of oil equivalent derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.