CALGARY, Jan. 12 /CNW/ - Result Energy is pleased to provide an
operations update and estimated capital budget for 2006.
For the second half of 2005 Result's exploration and development
activities were at an all time high and delivered record growth, as summarized
below:
Peace River Arch core area
- At the Worsley property, Result (36.4% WI) and its partners
constructed an extensive gas gathering system in the 4th quarter,
which brought three natural gas wells on stream. Although flush
production from these wells peaked at over 8,000 mcfd (2,900 mcfd
net) stabilized flow rates may not become evident for several
months. As such, these wells are being evaluated to better
understand the reservoir size and deliverability.
- Also at Worsley, Result (50% WI) and its partner have secured 2
rigs to drill 2 identified targets. The first rig moved to
location January 9 and will be followed by the second
approximately two weeks later (January 23). Result is confident
that the two wells, if successful, will substantially contribute
to gas production in the area and would expect to have them both
on-stream before April 1, 2006.
- In late 2005, Result expanded exploration activities to Eureka in
the northeastern part of the Peace River Arch and drilled 2
(1.0 net) exploration wells based on 3D seismic. Completion
operations are underway. If successful, these wells will be tied
into the newly constructed Worsley gathering system.
- In the Clearhills property, Result and several other area
producers have reached an agreement with a third party mid stream
operator to tie-in 1,500 mcfd (250 boed net of shut-in gas). These
facilities are expected to be on stream by early Q2 2006. The
Company also intends to drill 4 (1.8 net) additional wells in this
area during Q1 2006.
Central Alberta core area
- At the Winfield/Pembina area, in West Central Alberta, Result
(50% BPO) recently drilled and cased a second Viking gas well
based on 3D seismic. This well is a follow-up to a successful
Viking well drilled earlier in 2005. Subject to equipment
availability, Result expects to commence completion and tie-in
operations for the second well by mid January. Result has
substantially completed the tie-in for the first Viking well;
however a third party processor has experienced facilities
construction delays due to landowner issues. The facilities
application is before the EUB and Result expects a satisfactory
resolution before mid-February, with both wells expected to be on
production by the end of February. Based on the flow test for the
02-35 well, Result anticipates combined productive capability of
these two wells to be 3,600 - 5,000 mcfd (300 - 400 boed net).
- An Ostracod/Ellerslie exploration prospect in this area (50% WI)
was drilled and tested in Q4, but experienced non economic flow
rates and will be abandoned in 2006.
- Result is currently drilling a Nisku test (50% WI) in the Pembina
area. Drilling operations are expected to be completed by late
January.
Eastern Core Area
- At the Dodsland East property (50% WI), Result completed pipeline
tie-in operations for 4 Viking natural gas wells in late December,
and commenced flowing the wells at an initial combined production
rate of 400 mcfd net. Pending stabilized production results from
these 4 wells, Result will apply for down spacing to maximize
recovery from this property in a similar fashion to the program
that Result delivered at its other Viking gas properties in the
area.
- Result has a 100% natural gas well in the Viking - Kinsella area
that was brought on-stream in late December with an initial flow
rate of 180 mcfd.
- The Company is also completing a 6 section farm-in at Dodsland.
The property will be developed at 100% WI and is expected to yield
the same low risk Viking prospects and down spacing potential as
Result's existing Dodsland properties.
After reaching 1,000 boed in late December, Result's field estimated
production is now approximately 810 boed mostly attributed to start-up tuning
of flow rates, continued testing and 3rd party delays at Pembina. Significant
production growth was realized by the end of Q4-05, as compared to the Q3-05
average production rate of 448 boed. The Company also has approximately
500 boed from 6 wells that are shut-in or tested and awaiting tie-in over the
next quarter. Furthermore, Result is currently completing 4 wells with a
combined potential of 375 boed that, if successful, will be tied in by early
Q2.
Bill Matheson, President and CEO, noted, "We were extremely pleased with
our accomplishments in 2005, and our exploration and development prospect
inventory heading into 2006. While drilling, completion and pipeline tie-in
equipment will continue to be a challenge in 2006, we still were able to drill
a total of 30 wells (14.9 net) in 2005."
For 2005, Result generated an overall 84% success rate, in the form of 24
(12.1 net) natural gas and potential natural gas producing wells, 1 (0.6 net)
producing oil well, 3 (1.5 net) suspended gas wells, and 2 (1.0 net) wells
which are planned to be abandoned.
Other Developments
- Based on recent exploration and development success as well as
expanded operating activity, the Company is very pleased to
announce that Mr. Marty Scase, B. Comm has joined the team as
Manager, Land and Business Development effective January 9, 2006.
Mr. Scase previously worked for Petro-Canada and Talisman Energy.
Most recently, he was Senior Land Negotiator at StarPoint Energy
Ltd. Mr. Scase holds a Bachelor of Commerce degree in Petroleum
Land Management from the University of Calgary.
- Result's operating loan facility with ATB Financial has been
increased to $6.5 million as of December 22, 2005. It is expected
that the facility will be increased again in March upon completion
of the December 31, 2005 third party reserve report.
- Result's Board of Directors has approved an initial 2006 capital
budget of $18 million. Due to recent land acquisition and farm-in
programs completed, we expect to participate in at least 40 new
wells in 2006. Building on our 2005 objective of diversification
into 3 core areas, the timing of these wells should be spread out
across the 4 quarters, and provide a prudent mix of exploration
and development prospects.
Result Energy Inc. is a publicly traded Canadian energy company involved
in the exploration and development of oil and gas properties in western
Canada. Result trades on the TSX Venture Exchange under the symbol "RTE".
The TSX Venture Exchange does not accept responsibility for the adequacy
and accuracy of this release.
Investors are cautioned that this news release contains forward looking
information. Such information is subject to known and unknown risks,
uncertainties and other factors that could influence actual results or events
and cause actual results or events to differ materially from those stated,
anticipated or implied in the forward-looking information. Readers are
cautioned not to place undue reliance on forward-looking information, as no
assurances can be given as to future results, levels of activity or
achievements
The term barrels of oil equivalent ("boe") may be misleading,
particularly if used in isolation. A boe conversion ratio of six thousand
cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence
is based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the wellhead. All
boe conversions herein are derived from converting gas to oil in the ratio mix
of six thousand cubic feet of gas to one barrel of oil.
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