CALGARY, ALBERTA–(Marketwired – Aug. 28, 2014) – Forent Energy Ltd. (TSX VENTURE:FEN) is pleased to provide an operational update and to announce that it has filed its Interim Financial Statements and MD&A for the three and six months ended June 30, 2014, on SEDAR and its website.
Forent has completed its initial infill drilling program in the Twining field with a 100% success rate. All three wells are completed, equipped and on production at this time and within capital expenditure expectations. Forent and its partners also completed additional testing on the latest Montgomery well and performed a major work over on a well at its Wayne field.
PRODUCTION
Despite an exceptionally wet spring, Forent’s oil and natural gas sales during Q2 2014 increased significantly, averaging 172 BOEd compared with 54 BOEd in Q2 2013. With the recent drilling of 3 wells in the Twining field the Company’s total field estimated current production is 276 BOEd. The three new wells tripled production from the Twining field and increased the corporate liquids ratio to over 60%. Initial analysis of the new Twining wells indicates potential for optimization and additional production capability. Forent will be exploiting this opportunity immediately.
OPERATIONS
Forent drilled three wells on the Twining field during the second quarter. The first two wells drilled (13-26-32-25W4 and 05-26-32-25W4) were tied into the central battery and began oil and natural gas production in late July. Forent has recently concluded the installation of production equipment at the third well (02/02-08-32-24W4) with first production on August 23, 2014. The three producing wells are currently producing at 97 BOEd. After the initial two wells had achieved stable production rates, analysis has shown additional production potential and we are executing on production optimization.
Forent also recently reactivated two natural gas wells due to improved natural gas economics.
ONGOING EXPLORATION
At Montgomery, additional pressure measurements were taken from the Second White Speckled Shale Formation (2WS) interval in the most recently drilled well at 14-12-12-29W4M. This pressure data indicates that although the bottom-hole pressure continues to build, the 2WS interval is significantly depleted. Forent’s interpretation is that the offsetting 06-06 well, which produced enormous amounts of oil through natural fractures in the 2WS, has effectively drained the area around the 14-12 wellbore.
The fact that the 2WS in the 06-06 and 14-12 wells are in pressure communication through a system of natural fractures which can be identified geophysically, validates the 2WS play concept in this area. Based on our proprietary 3D seismic, we have identified four separate naturally fractured trends on Forent held lands.
Forent has identified twelve vertical drilling locations along the remaining three undrilled trends.
FINANCIAL
Forent’s revenues for the three and six months ended June 30, 2014 increased to $738,000 and $1.6 million respectively compared with $118,000 and $264,000 for the prior year periods. Funds flow from operations was an outflow of $16,000 during Q2 2014 compared with an outflow of $212,000 in the prior year quarter. Funds flow for the second quarter were lower than Q1 2014 as the Company’s Wayne field had a temporary drop in production when a key well required a workover to remove formation sand. For the first half of 2014, the Company’s funds flow from operations was $133,000 compared with an outflow of $684,000 in the prior year period.
Capital spending during Q2 2014 was $3.1 million. Three Twining wells totaling $2.25 million and a $561,000 workover at Wayne were the majority of the costs. Forent anticipates spending an additional $790,000 during Q3 2014 in conjunction with the Twining completion, and equipping activities.
OUTLOOK
Additional oil and natural gas production from the three new wells recently drilled at Twining will add substantial funds flow to the Company in future periods. These wells will be optimized over the next four to six weeks at which time Forent will assess the results and either proceed with drilling additional Twining wells or advance other corporate development opportunities.
The initial development phase of our Twining property is the first step in our plan to materially increase oil and associated gas production by the end of 2014. Within our portfolio, additional exploitation of low risk, development wells has the potential to meet this goal.
At Wayne, various development strategies for the property are under review. We anticipate firming up plans with our 50% working interest partner for a horizontal development well. Contingent on results, we have identified two additional horizontal development wells – one at a 50% working interest and one at a 100% working interest.
In the Provost area, our oil production is restricted by the water handling capacity of the facilities. We are planning an expansion of the water handling equipment at the Provost battery to enable increased oil production.
Over the previous three quarters, Forent has acquired over 30 sections of petroleum and natural gas mineral rights at Crown land sales. These lands have multi-zone potential for oil and natural gas from relatively shallow horizons (less than 1,300 metres) and are located within Forent’s southeastern Alberta core area. We are continuing to evaluate internally generated exploration prospects and complementary acquisition opportunities.
Shares of Forent trade on the TSX Venture Exchange under the symbol “FEN”.
[expand title=”Advisories & Contact”]ADVISORY: Certain information in this news release, including the operations at the Company’s properties, constitute forward-looking statements under applicable securities laws. Although Forent believes that the expectations reflected in these forward looking statements are reasonable, undue reliance should not be placed on them because Forent can give no assurance that they will prove to be correct. Since forward looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. The forward-looking statements contained in this news release are made as at the date of this news release and the Corporation does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
This release includes certain statements that may be deemed “forward-looking statements”. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s registered filings which are available at www.sedar.com.
BOE presentation:
Barrel (“bbl”) of oil equivalent (“boe”) amounts may be misleading particularly if used in isolation. All boe conversions in this report are calculated using a conversion of six thousand cubic feet of natural gas to one equivalent barrel of oil (6 mcf=1 bbl) and is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the well head.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Forent Energy Ltd.
Richard Wade
President & CEO
(403) 262-9444 #211
rwade@forentenergy.comForent Energy Ltd.
Brad R. Perry
CFO
(403) 262-9444 #208
bperry@forentenergy.com
www.forentenergy.com
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