CALGARY, ALBERTA–(Marketwire – Aug. 7, 2012) – Chinook Energy Inc. (“Chinook”) (TSX:CKE) is pleased to announce the initial flow rates from the TT-16 horizontal well.
The initial horizontal test well of the Ordovician reservoir on the Bir Ben Tartar (“BBT”) concession began production testing on July 15, 2012. Over the first six days (July 15 to July 21) the flow period was interrupted by attempts to circulate sand and clean the wellbore to its full length and included periods where wellbore energy was assisted by nitrogen injection, and as a result the flow rates over that period are not representative of well performance. Since July 22, 2012, the well has flowed under its natural reservoir energy. Over the initial 10 day flow period the TT-16 well produced at an average oil rate of 897 barrels of oil per day (bopd), an average water rate of 331 barrels of water per day (27% water cut) and an average gas-oil-ratio of 1,110 standard cubic feet of gas per barrel of oil (scf/bbl). To date Chinook has recovered 87% of the 8,700 barrels of load fluid and the water cut over the last 48 hours of flow has decreased to approximately 10%. The average daily oil rate over the last 48 hours has been 770 bopd through a 3/4″ choke at a bottomhole flowing pressure of 925 psi. Although the flowing bottomhole pressure has shown signs of beginning to stabilize, extrapolation of the early trend data in the first application 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 in due course. The TT-16 well was fracture stimulated along the 832 meter horizontal section (previously incorrectly reported as a 950 metre horizontal section) with the placement of approximately 385,000 pounds of sand over eight stages.
Matt Brister, Chief Executive Officer of Chinook, commented, “Although the results are early and will continue to show declines, we are encouraged by the multiple of vertical well production rates achieved by this initial horizontal test when compared with early stage data from vertical wells at TT, in similar rock. The experience gained by our partnership in successfully executing this initial operation will help us optimize the BBT field’s exploitation by increasing the length of the horizontal section, the number of stages we are able to pump on the completions, and reducing the well costs. Chinook, Etap and Cygam are very excited about these early results and will continue with the execution of our four well horizontal program over the balance of 2012.” The TT13 well is currently drilling the horizontal section and we expect to complete the drilling operations within 7-10 days and commence the completion in early September.
Partners in the concession are block holder Enterprise Tunisienne D’Activites de Petrolieres (Etap) and Contractors Chinook (86% interest) and Cygan Energy Inc. (14% interest).
Chinook will provide a further update on our Tunisian operations with our release of the second quarter financial results on August 14, 2012.
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 of sustaining current production rates, future recoverable liquids, and future operations.
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, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, Chinook’s ability to obtain equipment in a timely manner to carry out exploration and development activities, the impact of increasing competition, the ability of Chinook to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions, the continued availability of adequate debt and equity financing and cash flow to fund its planned expenditures. 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 affect 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.