Chinook Energy Inc. (CKE.TO) (“Chinook” or the “Company”) is pleased to provide the following operational update.
Bir Ben Tartar Concession, Tunisia
TT-10 Horizontal Well Initial Flow Rates
The TT-10 well is Chinook”s fourth horizontal well test of the Ordovician Quartzite Reservoir on the Bir Ben Tartar Production Concession (the “BBT Concession“). Partners in the BBT Concession are Enterprise Tunisienne D”Activites de Petrolieres (“ETAP“) as block holder and Chinook (86% interest) and Cygam Energy Inc. (14% interest) as contractors.
Completion operations on TT-10 commenced on January 7, 2013 and, following an 11-stage fracture stimulation placing a total of 270,000 pounds of proppant, production testing began on January 12, 2013. Over the initial 19 day flow period the TT-10 well flowed an average oil rate of 618 barrels of oil per day (“bopd“), an average water rate of 516 barrels of water per day (44% water cut) and average gas-to-oil ratio of 1,039 standard cubic feet of gas per barrel of oil.
BBT Concession Production Update
Initial production (“IP“) and current production data from the first three horizontal wells on the BBT concession is as follows:
to YE 2012
|TT-16||July 21, 2012||857||801||704||450||8||98,775|
|TT-13||Sept 15, 2012||3,251||2,563||1,779||976||40||176,815|
|TT-11||Oct 27, 2012||1,473||897||632||519||44||46,766|
December gross production from the BBT Concession was 3,512 bopd from seven vertical and three horizontal producers. Water cuts from the horizontal wells have stabilized at approximately 40% in three of the four wells, a much higher average than seen in the stimulated vertical wells. Plans for water injection into the main BBT reservoir are progressing and will be included in 2013 facility development. Chinook”s share of production is approximately 54%, with ETAP paying the tax and royalties out of its share of profit oil.
2013 BBT Drilling Program and Sud Remada Permit Activity Update
Chinook has budgeted for the drilling and completion of six wells on the BBT Concession in 2013. The anticipated commencement date of the drilling has been delayed to April 1, 2013 due to issues arising from the tendering of contracts and ETAP approvals. Chinook will provide guidance on anticipated 2013 production volumes from the BBT Concession at such time as a firm drilling commencement date has been set.
In addition to development drilling on the BBT Concession, Chinook will drill an exploration well on the Sud Remada Permit in 2013 targeting an Ordovician feature similar to that found at the BBT Concession and will shoot a 250km2 3-D seismic survey on the southern-most portion of the Sud Remada Permit, which currently has very limited 2-D seismic data, in an attempt to extend the prolific Acacus oil fairway onto the block.
Given the recent and unfortunate events in neighboring Algeria, the Company remains vigilant in respect of the safety of its employees, contractors and area stakeholders, particularly at its field operations. Since the Arab Spring revolution in 2011, the Company has experienced only very limited operational downtime and to date, no security-related work interruptions. In response to the escalation in security concerns, the Tunisian National Guard has increased its presence at the BBT Concession to mitigate any physical threat to the Company”s operations.
Chinook Presenting at Two Upcoming Conferences
Walter Vrataric, President of Chinook, will be participating in a panel discussion regarding opportunities in North Africa at the RBC Capital Markets International Exploration and Production Investor Day in Toronto at the Fairmont Royal York, February 6, 2013 at 12:40 p.m. EST.
Mr. Vrataric will also be presenting at the National Bank Financial Intermediate Energy Growth and Yield Conference in Toronto at The Ritz-Carlton, which will be held February 13 and 14, 2013.
An updated corporate presentation will be posted to the Investor Information section of Chinook”s website (www.chinookenergyinc.com) later this morning.
About Chinook Energy Inc.
Chinook is a Calgary-based public oil and gas exploration and development company that combines multi-zone conventional production with resource plays in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.
Forward-Looking Statement Advisory
In the interest of providing shareholders and potential investors with information regarding Chinook, including management”s assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “potential”, “target” and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to TT-10 well expectations and future Tunisian operations to be completed and the timing thereof.
With respect to the forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: the ability of Chinook to continue to operate in Tunisia with limited logistical, security and operational issues, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, Chinook”s ability to obtain equipment in a timely manner to carry out exploration and development activities, Chinook”s ability to obtain required regulatory approvals, the ability of Chinook to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions and the continued availability of adequate debt and equity financing and cash flow to fund its planned expenditures. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook”s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements.
These risks and uncertainties include, without limitation, political and security risks associated with Chinook”s Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could affect Chinook”s operations and financial results are included in Chinook”s Annual Information Form for the year ended December 31, 2011 and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Chinook”s website (www.chinookenergyinc.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Chinook does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Barrels of Oil Equivalent
Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (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. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.