NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES
DEETHREE EXPLORATION LTD. (“DeeThree” or the “Company“) (DTX.TO)(DTHRF) is pleased to announce the results of a four day production test of its most recent horizontal Belly River oil well in its Brazeau property. The Company has a 100% working interest in the well.
After fracture stimulation, the well continued to flow for four days up the 4 1/2″ frac string at an average rate of 1770 bbls/d of 44° API reservoir oil and 1.6 mmscf/d of natural gas with a final rate of approximately 1,580 bbls/d of oil and 1.8 mmscf/d of natural gas (on a 1.5″ choke at a wellhead pressure of 40 psi). With expected conservation of produced natural gas for sale, this final test rate equates to approximately 1920 boe/d (88% oil and liquids). Final water cuts at the end of the test period were approximately 12%.
The well was drilled to a planned total depth with a horizontal lateral of approximately 2,000 metres in an upper Belly River sand. The horizontal lateral was successfully fracture stimulated, placing 550 tonnes of sand over 19 stages using an energized water based system. The well is currently shut-in for pressure work and operations have begun to tie the well into the Company’s existing pipeline and facility infrastructure.
DeeThree has now drilled 18 Belly River horizontal wells in its Brazeau property, where it has more than 70 sections of high working interest Belly River lands. These wells are widely spread throughout its land base and with these wells DeeThree has now proved significant productivity in 6 different distinct intervals within the Belly River zone. As well, production results have continued to improve as a result of DeeThree’s rapidly increasing geotechnical understanding of the Belly River zone and improving drilling and completion techniques. DeeThree has now initiated a resource evaluation over its Brazeau Belly River lands.
DeeThree’s drilling inventory in Brazeau continues to increase with the Company now having more than 100 horizontal drilling locations in inventory on its Belly River land base as a result of the success of its horizontal drilling program and the well control provided by historical vertical wells.
As a result of the success of its drilling program in the first quarter of 2013 and resulting expected production gains, DeeThree has undertaken a review of its 2013 capital program with the intent to further accelerate the exploitation of its Brazeau Belly River property and its Ferguson Alberta Bakken property. This review coincides with the annual review of DeeThree’s credit facility. DeeThree anticipates announcing in mid-April the results of its credit facility review and updated guidance for 2013.
Reader Advisory
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: oil and natural gas production levels, capital expenditure programs, projections of market prices and costs, supply and demand for oil and natural gas, the quantity of reserves, treatment under governmental regulatory and taxation regimes and expectations regarding DeeThree’s ability to raise capital and to continually add to reserves through acquisitions and development.
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. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could effect DeeThree’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
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.
Test Rates. Test rates are not necessarily indicative of long-term performance or of ultimate recovery. Neither a pressure transient analysis nor a well-test interpretation has been carried out and the data should be considered to be preliminary until such analysis or interpretation has been done.
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.
We seek Safe Harbor.
DeeThree Exploration Ltd.
Martin Cheyne
President and Chief Executive Officer
(403) 263-9130