Artek Exploration Ltd. Provides Operations Update and Announces Further Success at Inga/Fireweed
CALGARY, ALBERTA – (Marketwire – April 5, 2011) – Artek Exploration Ltd. ("Artek" or the "Company") is pleased to provide the following operational update.
The Company has successfully drilled and completed its second horizontal Doig well (60% W.I.) in the Inga/Fireweed area of British Columbia to a total measured depth of approximately 3,100 metres (including approximately a 1,200 metre horizontal lateral). The well was successfully completed with a 12 stage fracture stimulation program using GasFrac’s propane frac technology. The final rate after a 43 hour clean-up, and a 27 hour flow test or 70 hour flow period was restricted at 5 mmcf/d (of which approximately 4 mmcf/d was formation gas) and approximately 1,400 bbl/d of condensate for a total rate of approximately 2,040 boe/d at a flowing pressure of 1,070 psi (7,373 kPag). The Company is satisfied with the initial test results and has released testers due to road and lease conditions. Further testing inline will be conducted after well-site equipping is finalized over the next few days. At the initial liquids ratio of over 200 bbls of condensate per mmcf of natural gas and an assumed oil price of $100/bbl Cdn wellhead and a natural gas price of $3.85/GJ Aeco, the Company anticipates initial operating netbacks from the well greater than $47/boe. In the immediate area, Artek holds interests in 16,780 gross (10,094 net) acres or approximately 25 gross (15 net) sections almost all of which it operates, and has an additional 3 sections under option through a farm-in commitment. The test results from the Company’s second well, which is a substantial step-out from existing well control, provides strong validation of the Company’s geological, geophysical and engineering model for the play and firmly establishes this new core area. Based on mapping, management estimates it has another 37 gross (20 net) horizontal Doig locations on Company or farm-in lands. The production volumes are processed at Artek’s operated facility at Inga. The Company plans to drill an additional three horizontal Doig wells at Inga through the remainder of 2011.
In the Sinclair area, the Company has decided to delay the completion of its second Montney horizontal well (50% W.I.) offsetting its 8 mmcf/d discovery well drilled in 2010. The well was drilled to a total measured depth of 4,400 metres and is currently awaiting a 14 stage fracture stimulation. Due to potential cost overruns as a result of break-up, the completion will be postponed until after break-up; expected to be late May to early June.
At Noel, British Columbia, Artek has completed and brought on stream an additional uphole zone in its deep Nikanassin exploration well drilled in early 2010 at a rate of approximately 1.2 mmscf/d. Artek has a 75% working interest in the zone.
Late in the first quarter, Artek spud a shallow horizontal well (100% W.I.) in the Peace River Arch area of Alberta that is targeting light oil and natural gas in the Triassic. The well reached a total measured depth of approximately 2,530 metres (with an approximately 1,125 meter lateral). The well is scheduled for completion over the next several days and if successful will be subject to 5% royalties as per the Alberta government’s horizontal drilling incentive program. The Company has several follow up prospects with the potential for oil in the Triassic that it believes can be accessed through horizontal drilling. In all, Artek has approximately 71 net sections of land in the greater north Peace River Arch area that has seen in excess of $90 million invested by industry at Crown land sales since the beginning of the year.
The Company is pleased with the early results achieved from its 2011 capital program which is largely focused on validating our liquids-rich gas and crude oil opportunities accumulated over the last two years to complement its deep natural gas inventory.
ADVISORIES
Forward Looking Statements: This press release contains forward-looking statements. Management's assessment of future plans and operations, production estimates, initial production rates, drilling plans, timing of drilling and tie-in of wells, anticipated netbacks, potential additional drilling locations at Inga/Fireweed, and productive capacity of new wells at Inga/Fireweed, may constitute forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties, some of which are beyond Artek’s control, including without limitation, 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 estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, the inability to fully realize the benefits of the acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward looking statements. Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Artek believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct.
In addition to other factors and assumptions which may be identified in this document and other documents filed by the Company, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Artek operates; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; Artek's ability to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and Artek's ability to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company'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) or at the Company's website (www.artekexploration.com). Furthermore, the forward looking statements contained in this document are made as at the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Netbacks: Operating Netbacks provided herein are calculated by subtracting royalties, operating costs and transportation costs from petroleum and natural gas sales calculated on a BOE basis.
Operating Netbacks do not have a standardized measure prescribed by Canadian General Accepted Accounting
Principles and therefore may not be comparable with the calculations of similar measures for other companies.
BOE Conversions: Barrel of oil equivalent ("BOE") amounts may be misleading, particularly if used in isolation. A BOE conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel. This conversion ratio of six thousand cubic feet of natural gas to one barrel is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Artek is a crude oil and natural gas exploration, development and production company headquartered in Calgary, Alberta, Canada. Artek's shares trade on the Toronto Stock Exchange under the symbol "RTK".
FOR FURTHER INFORMATION PLEASE CONTACT:
Darryl Metcalfe President and Chief Executive Officer Artek Exploration Ltd. (403) 296-4799
Darcy Anderson Vice President Finance and Chief Financial Officer Artek Exploration Ltd. (403) 296-4775
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.
