Calgary, Alberta – Leucrotta Exploration Inc. (TSXV: LXE) (“Leucrotta” or the “Company”) is pleased to announce it will commence operations of Phase I of the Mica Pad Development mid-July and should be on production by mid to late October. The first Pad will consist of 4 wells with 3 placed into the Lower Montney and one placed into the Basal Montney. The wells will have horizontal lengths of 2400 metres and be completed with a minimum of 130 fracs. Each stage will have 25-35 tonnes of sand per stage or approximately 2 tonnes per metre of horizontal length. This is a material increase from Leucrotta’s delineation wells that had horizontal lengths of 1500 metres and only 28-41 fracs with an average of less than 1.5 tonnes of sand per metre of horizontal length. Leucrotta believes the increased length and frac intensity will result in materially higher per well production and ultimate reserves based on analogies from other operators in the oil window of the Montney.
Leucrotta has also recently completed and tested a previously drilled Basal Montney well. The well was completed with 41 frac stages at 60 tonnes of sand per stage and was tested for 10 days. At the end of the test, the well was flowing 300 bbls/d of light oil and approximately 1 mmcf/d of gas. This was very similar to the test of the offset well in the Lower Montney and as noted above, Leucrotta will now integrate the Basal Montney into Phase I of the Mica Development using materially greater frac intensity.
Leucrotta is very pleased with Basal test and has the following benefits to the Company:
- Proves commerciality of a large resource in the oil window of the Montney
- Adds material drilling inventory
- Increases development efficiencies and enhances returns by creating scenario for stacked pad development when combined with the Lower Montney
Leucrotta is also planning to conduct an extended test of an Upper Montney well at Mica in early fall to better determine a stabilized rate and estimated ultimate recoveries. The well was originally flowing approximately 15 mmcf/d of gas and 50 bbls/d of light oil at the end of a 5-day test. If successful, Leucrotta’s drilling inventory and stacked development would be enhanced even further.
In addition to adding value through the development of the Montney stacked zones at Mica, Leucrotta will also look to surface value on other areas of its extensive Montney land base.
As previously announced, Leucrotta has a 5-year plan to grow to 30,000 boepd, with the Basal Montney and the impending commencement of the test pad being two positive first steps. We look forward to updating shareholders in the near future on additional milestones as they are achieved.
Leucrotta had recently announced the expiry of a non-brokered private placement of flow through units that it is now re-initiating. Leucrotta has submitted an application to the TSX Venture Exchange to conduct a non-brokered private placement of up to 1.87 million units of the Company (“Units”) consisting of one common share to be issued on a flow-through basis in respect of Canadian development expenses (CDE) under the Income Tax Act (Canada) and one flow-through share purchase warrant at a price of 73 cents per Unit for gross proceeds of up to $1.365 million. Each flow-through warrant has an exercise price of $1.00 per CDE flow-through share and a term of three years from the date of issuance. The placement will be predominately taken up by insiders.