Nextraction Announces Flow Rates for Provost Viking PoolOctober 6, 2011
Calgary, AB– Nextraction Energy Corp. (TSX-V: NE) (the “Company”) is pleased to announce it has completed testing its first Viking Horizontal light oil well in the Provost Viking Pool. The 1,200 meter horizontal leg was fractured in 13-stages and flowed at an average rate of 177 barrels of oil equivalent/day (BOE/d) during the first five days of testing.
Average flow rates were comprised of 109 barrels of oil and 410 mcf per day of natural gas, with a 75% watercut. To market and sell the natural gas associated with the oil reserves, the Company plans to construct a pipeline as production volumes are sufficient to warrant economic viability of the pipeline. Permitting of the pipeline is underway and the Company expects construction to be completed late in the fourth quarter.
In an effort to determine if gas rates could be reduced to allow the well to continue producing during pipeline construction, the Company inserted a bridge plug in the well isolating five fractured intervals from production. After installing a down hole pump in the well, the Company tested the eight open fractured intervals for eleven days at an average rate of 73 BOE/d, comprised of 38 barrels of oil and
210 mcf gas per day, with a 91% watercut. Production from the well will continue when the pipeline is operational for gas sales. Production facilities to handle the fluid production are currently being expanded, and the Company has sufficient water injection capacity to handle the water.
Company President Mark S. Dolar said “Our first well in Provost was successful and is one of the more productive wells in the field. The gas adds economic benefit to the project and we are encouraged to drill a second well in the area.”
Nextraction owns 5.25 sections in its Provost pool including 100% working interest in one section, and 50% working interest in an additional 4.25 sections with a joint venture partner. Regulatory approvals have been received for the second horizontal well and the well is expected to spud shortly. The successful completion of the first well further validates the Company’s low-risk drilling inventory of up to 36 wells. Nextraction has identified 21 locations which includes 4 locations at 100% interest, and 17 locations at 50% interest (resulting in a further 8.5 net wells). In addition, another 15 locations may be drilled at a 50% interest (7.5 net wells), should down spacing be warranted.
The Company recently announced it has closed a bridge loan with a related party in the amount of
$1.5 million to continue development of the project.
About Nextraction Energy Corp.
Nextraction Energy Corp. is a Canadian junior oil and natural gas company engaged in the exploration and development of oil and natural gas resources in North America. The Company’s model is the “next round of extraction on known plays.” Nextraction targets projects along trends with known reserves that provide low risk, high return development opportunities in both conventional and unconventional resource projects. In addition to the Provost pool, the Company is producing light oil and liquids rich gas at its Pinedale Anticline property in Wyoming.
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Certain statements made and information contained herein may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation. These statements relate to future events or the Company’s future performance. Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results “may”, “may have”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Although management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements speak only as of the date of this Press Release and are expressly qualified, in their entirety, by this cautionary statement.
BARRELS OF OIL EQUIVALENT PRESENTATION
Natural gas volumes have been converted to barrels of oil equivalent (“boe”) at a ratio of six thousand cubic feet (“mcf”) of natural gas to one barrel of oil equivalent. This conversion ratio is based upon an energy equivalent conversion method primarily at the burner tip and does not represent equivalence at the wellhead. Furthermore, this conversion ratio is not intended to represent monetary equivalents between natural gas and oil. Boe figures may be misleading, particularly if used in isolation.
CAUTIONARY NOTE REGARDING RECOVERY OF RESOURCES
The exploration for and production of hydrocarbons is a speculative venture necessarily involving substantial risk. There is no certainty that resources will be recovered by the Company in commercial quantities from the Provost field. The recovery of commercial quantities of hydrocarbons from the Provost field is subject to numerous risks including risks related to the market price of oil, the ability of the Company to obtain necessary financing to recover the hydrocarbons, climate conditions, the ability to access the resource, technological limitations and the ability of the Company to attract and retain the necessary staff.
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