Nextraction Plans to Frac Additional Pay Sands in the Noble #6-24 Well and Increase its Exploration ActivitiesSeptember 1, 2010
North Pinedale Project
Vancouver, BC - Nextraction Energy Corporation (TSX-V: NE) (the "Company" or "Nextraction") announced that it plans to "frac" the remaining 340 feet (106 meters) of net pay in the Middle Lance, Upper Lance and Tertiary formations for the Noble #6-24 well located on the northern extent of the Pinedale Anticline. "Successful results from producing natural gas and condensate from the Mesaverde and Lower Lance formations in the Company's Noble #6-24 well, increased knowledge from production logging and newly acquired regional data has confirmed it is warranted to proceed with "fracing" the remaining 44% of pay sands in the well", said the Company's President and CEO, Mark S. Dolar.
Nextraction has met with other Pinedale operators in an exchange of information that has led to a conclusion to further develop the northern extent of the Pinedale Anticline. Based on the positive production results from the lower zones of the Noble #6-24 well, increased oil-to-gas ratios in the Noble #6-24 well and the information exchange with other operators in the area, the Company is planning to conduct a seismic program across Nextraction's property leases to further identify structural characteristics of the Pinedale Anticline and determine future well location sites. The Company believes the northern extent of the Anticline may have potential for increased field development, similar to the Jonah field on the southern end of the Anticline, and the seismic program will assess this exploration opportunity while at the same time providing detailed targeting information for the Company's proposed second well.
Nextraction has recently increased its interest in the northern portion of the Pinedale Anticline by 1,023 acres and now owns an interest in 3,574 acres with an experienced operator in the region, Vantage Energy, LLC.
Noble #6-24 Frac Details
In early July 2010, the Company completed a 13 multi-stag frac in the Mesaverde and Lower Lance formations of the Noble #6-24 well using a sand proppant frac design. After stabilizing, the Noble #6-24 had an initial 24 hour flow rate of 1,050 thousand cubic feet of gas (MCFG), 29 barrels of oil and 270 barrels of water (including flowback frac fluids) on a 24/64ths inch choke. The well was placed into production in July and generated US$139,837 of gross revenue from 26 days of production. Completion of only the "lower" productive zones is a common approach used by adjacent area operators to determine the gas production rates from these lower zones prior to fracing the "upper" pay zones. Log signatures of the Middle Lance, Upper Lance and Tertiary formations appear to generally contain more porous zones than sands previously frac'd in the lower zones. Average porosity of the lower zones was approximately 9%, and the upper zones average over 12% porosity. The Company will conduct an additional 8 multi-stage frac for the upper zones of the Noble #6-24 well using slickwater based fracing fluids, which is expected to substantially increase production volumes.
Fracing procedures will commence immediately upon scheduling availability.
A recent reserve report (see news release 7-28-10) anticipates average recovery of 4.977 Billion Cubic Feet of Gas (BCFG) and 59,700 barrels of oil [being 889,200 barrels of oil equivalent (BOE)]* for the Noble #6-24 well.
*BOE (Barrels of Oil Equivalent) and BCFGE (Billion Cubic Feet of Gas Equivalent) are based on 1 barrel of oil per 6 MCFG - This conversation ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Further Investment Planned at Pinedale
Costs to drill, complete the lower stages, and place the Nobel #6-24 well into production total US$5.2 MM. Completion costs for the upper zones of the well are estimated at US$900,000. The funds to complete the rest of the well are deposited in escrow with Vantage Energy, LLC. The costs to design and acquire the proposed seismic data in connection with the Company's proposed exploration activities are estimated at US$750,000. Seismic costs are typically borne proportionately by contiguous lease holders and the Company will solicit adjacent lease owners to participate in the acquisition of the seismic data.
About Nextraction Energy Corp.
Nextraction Energy Corp. is a Canadian junior oil and gas company engaged in the exploration and development of oil and gas resources in North America. Nextraction targets projects along trend with known reserves that provide lower risk, high return development opportunities in both conventional and unconventional resource projects, where our technical expertise can be applied to enhance production. The Company pursues acquisitions that fit the model of the "next round of extraction on known plays." Nextraction is headquartered in Vancouver, BC, Canada, with an operations office in Golden, Colorado.
On behalf of the Board of Nextraction Energy Corp.
"Mark S. Dolar"
President and CEO
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For further information on behalf of Nextraction Energy Corp., please contact:
Mark S. Dolar
President and Chief Executive Officer
Nextraction Energy Corp.
Toll Free: 1-888-630-0370