CALGARY, ALBERTA–(Marketwire – Sept. 17, 2012) – Chinook Energy Inc. (“Chinook”) (TSX:CKE) is pleased to announce the initial flow rates from the TT-13 horizontal well, which is the second horizontal well test of the Ordovician Quartzite reservoir in the Bir Ben Tartar concession. Partners in the concession are block holder Enterprise Tunisienne D’Activites de Petrolieres (ETAP) and Contractors Chinook (86% interest) and Cygam Energy Inc. (14% interest).
Well completion operations began on September 4, 2012 and following an 11 stage fracture stimulation and well clean out to ensure all ports were open, production testing began on September 15, 2012. Over the initial 48 hour flow period the TT-13 well produced at an average oil rate of 2,959 barrels of oil per day (bopd), an average water rate of 1,848 barrels of water per day (38% water cut) and an average gas-oil-ratio of 1,087 standard cubic feet of gas per barrel of oil (scf/bbl). The average daily oil rate over the last 12 hours has been 3,468 bopd through a 1.5″ choke at a flowing wellhead pressure of 224 psi. Cumulative water recovered to date represents approximately 38% of the load fluid used during the completion operation and water cuts have decreased from 84% to 24% over the flow period to date.
Early trend data in these initial applications of a multi-staged completion of the tight Ordovician sand reservoir should be assessed on more mature initial production data of 30 and 90 days, which will be released as that data becomes available. The TT-13 well was fracture stimulated along the 1,035 meter horizontal section with the placement of approximately 438,850 pounds of sand over 11 stages. By way of comparison, the first horizontal test well (TT-16) averaged 897 bopd over the first 10 days of production from an 832 metre horizontal section with an eight stage completion. The average rate over the first 30 days of production was 825 bopd and the current rate after 54 days production is 665 bopd with an 11% water cut.
The TT-13 well encountered more reservoir by virtue of its longer length, the sand quality, as evidenced by samples, MWD logs and gas shows while drilling, also appears to be better at the TT-13 well when compared to similar data for TT-16. Completed well costs for the two wells is similar at approximately $12 million per well as improvements in the well design and execution of the TT-13 well program were offset by significant lost circulation problems while drilling. Chinook is confident well costs can be reduced materially on a percentage basis as its experience and program size increases.
Chinook is currently drilling the horizontal build section at the third well at TT-11 and expects to finish the drilling operation within 10 days and begin completion operations in early October.
About Chinook Energy Inc.
Chinook is a Calgary-based public oil and gas exploration and development company that combines multi-zone conventional production with resource plays in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.
In the interest of providing shareholders and potential investors with information regarding Chinook, including management’s assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “potential”, “target” and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to management’s expectations regarding future production and the composition thereof from the TT-13 well and the expected timing of completing the drilling and commencing completion of the TT-11 well.
With respect to the forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: the ability of Chinook to continue to operate in Tunisia with limited logistical security and operational issues, the drilling and completion operations on the TT-11 well will be conducted as presently planned and in the timeframe presently contemplated, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, and Chinook’s ability to obtain equipment in a timely manner to carry out exploration and development activities.. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook’s actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, without limitation, political and security risks associated with Chinook’s Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources.
As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could effect Chinook’s operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) and at Chinook’s website (www.chinookenergyinc.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Chinook does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Barrels of Oil Equivalent
Barrels of oil equivalent (boe) is calculated using the conversion factor of 6 mcf (thousand cubic feet) of natural gas being equivalent to one barrel of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 bbl (barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.