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Message: Petro One's First Horizontal Well On Production!
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Petro One's First Horizontal Well On Production!
| PETRO ONE ENERGY CORP. 1300-1111 West Georgia Street Vancouver, BC V6E 4M3 Telephone: 604 566 9089 Toll free: 877 566 9089 Facsimile: 604 564 8003 PetroOneEnergy.com Twitter.com/PetroOneEnergy |
TSX-V: POP Frankfurt: C6K1 OTC: CUDBF.PK |
PETRO ONE'S FIRST HORIZONTAL WELL ON PRODUCTION
February 5, 2015 - Petro One Energy Corp. (TSX-V: POP) is pleased to report that Well 6-22, its first horizontal well drilled in the upper Viking, was completed as planned and has been on production since mid-January. The well, which is located in the Milton oil field in western Saskatchewan, is currently producing emulsion and recovering frac fluid from the 3,500 barrels of frac fluid used for completion in early January. The company will report the average production volumes once the majority of the frac fluid has been recovered and the emulsion ratios normalize. The precise oil cut from the emulsion will be known once Petro One receives its first monthly statement from the processor.
The horizontal drilling at 6-22 confirmed excellent reservoir characteristics and continuity of a thick Viking sand underlying Section 22. The Milton Viking reservoir has a strong gas drive that accounts for the excellent production volume demonstrated by this new horizontal well. Core from the nearest Petro One vertical well, located 825 metres to the south-southeast, had an average porosity of 21.7%, an average permeability of 16.89 mD over 10 metres and a maximum permeability of 54.6 mD over the whole Viking interval. Sample cuttings from the lateral leg of the new horizontal well are described as being very similar to the Upper Viking sand in the core from that vertical well.
Petro One's 10A-15-30-27 vertical oil well, located 1,360 metres south-southeast of the new 6-22 horizontal well, has shown a substantial improvement since early fall, when it was producing 15 bopd. Production increased to an average of 28 bopd during September and October, and averaged 19 bopd over the four month period September 1 – December 31, 2014. Since October 1, 2014, the well has produced entirely oil emulsion. This well has produced more than 14,000 barrels of oil over 3.5 years of production and is anticipated to provide the Company with a steady revenue stream for years to come. The production history from this well in the newly discovered Milton field demonstrates it should be a long-lived producer with a very slow decline.
McDaniel and Associates have assigned Petro One a prospective resource of 1.8 million barrels of recoverable oil on the Milton property, as well as 124,800 barrels of proved plus probable reserves (Petro One News Releases May 8 and May 13, 2014). The next reserve update will take the results of the new horizontal well into account.
“This horizontal well has confirmed and expanded the known extent of the Viking oil reservoir on Petro One's Milton property”, said Petro One Chief Geologist Trevor Bremner. “The technical team has described oil saturated core from two vertical wells on section 10 as excellent quality Viking sand and strongly recommended focusing on horizontal drilling in the Upper Viking as the best way to exploit that reservoir. Mapping based on core and sample descriptions, wireline logs and seismic indicates that all of Petro One's Milton land is underlain by the same thick high quality Viking reservoir sand. We have up to 48 remaining horizontal drill locations on Petro One's Milton property, and two new horizontal wells are in the licensing process. The results to date indicate the property should provide a solid low risk base to quickly grow the Company through production as the oil market improves.”
The Viking in West Central Saskatchewan produces 35° – 39° API light sweet oil, and Saskatchewan offers an extremely attractive royalty system whereby Viking horizontal wells qualify for a 2.5% royalty rate on crown lands on the first 37,700 barrels of cumulative oil production, significantly enhancing the economics for horizontal drilling.
South Reston J4 SR-1 test
Testing of the joint Petro One - Goldstrike vertical wildcat Well SR-1 at Pipestone, Manitoba produced a small amount of an oily substance with a petroleum odor, but the amount was insufficient to provide conclusive results. Based on the inconclusive results, risk, and current oil markets, the company plans to focus its future efforts on low risk development drilling in its Milton oil field.
KMDC Update
KMDC Resources Ltd. and Korea Myanmar Development Company Ltd. (together “KMDC”) remain in default of their obligations to the Company, and the final funding deadline of January 30, 2015 has passed without any further payment and without any further communication from KMDC. The Company has legal claims for those defaults against KMDC and its principals, Lee Young Soo and Seok Hee-guen, and has the ability to pursue those claims in due course. In the near term the Company will remain focused on its business at Milton. The Company has over $2 million in cash, including the $650,000 forfeited by KMDC, and no debt. Based on the results of the new horizontal Well 6-22, the Company looks forward to receiving a new reserve estimate in due course.
“Peter Bryant”
President & Director
For further information, please visit the company’s website at PetroOneEnergy.com, follow the Company’s tweets at Twitter.com/PetroOneEnergy and contact Jeff Stuart of King James Capital Corporation, handling Investor Relations for the Company, by telephone at (604) 805 0375 or by email at jstuart@kingjamescapital.com.
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