Pinecrest Energy Inc. provides operational update
TSX Venture Exchange: PRY
CALGARY,
Jan. 17, 2013 /CNW/ - Pinecrest
Energy Inc. ("Pinecrest" or the "Company") is pleased to announce
that its production, based on field estimates, is currently 5,080
boe/d (99% oil and liquids) and is in line with its previous 2012
exit guidance of 5,000 boe/d. In addition, the Company expects that
the wells placed on production in December
2012 will continue to show improvement in production rates
through January and February 2013 as
completion fluids are recovered.
The Company's 2013 Greater Red Earth area
development program is well underway and Pinecrest will provide
details of its 2013 capital plan and guidance together with a
detailed operational overview on February 6,
2013.
In the interim, we are pleased to provide the
following update:
Waterflood Update
The positive results of Pinecrest's joint
waterflood provided the Company with sufficient confirmatory data
to proceed with several waterflood schemes with the objective of
capturing the repeatable upside associated with pressure
maintenance. In this regard, and in an effort to accelerate
the Company's ability to implement fully developed horizontal well
waterflood schemes in 2013, Pinecrest elected to allocate capital
towards infill drilling a total of three sections of land (eight
horizontal wells per section spacing; 1,400m laterals) by drilling
12 gross (12.0 net) infill horizontal wells in the third and fourth
quarters of 2012.
Initial results from the Company's first 100%
operated waterflood scheme (Evi - Project #2) have been very
encouraging and in accordance with Company expectations.
Injection commenced on December 20,
2012, and has been on continuous injection since.
After 25 days of injection, all of the offsetting producing wells
in the scheme are already showing a positive response, each
demonstrating an increase in pressure and current production rates
up to two times higher than rates prior to injection.
Pinecrest has received ERCB approval for its
second 100% operated waterflood (Loon -Project #1), with injection
scheduled for early February 2013,
and an initial response expected shortly thereafter. An
additional five schemes have been applied for and approvals are
anticipated to be obtained within the next four to five weeks after
which all of these projects are scheduled to be phased in
throughout the second and third quarters of 2013. The
locations of the seven waterflood schemes are dispersed throughout
the Greater Red Earth area, encompassing the Evi, Otter, Loon and
Red Earth fields. All of the
proposed waterflood schemes will utilize existing wells and will
enjoy similar or lower capital efficiencies as the initial Evi -
Project #1 waterflood. The expected budgeted capital for the
seven operated waterflood projects is approximately $7 million.
Drilling Summary
During 2012, Pinecrest drilled a total of 39
gross (37.71 net) operated Slave Point horizontal oil wells in the
Greater Red Earth area. Of these, 16 gross (15.25 net), wells
were drilled in the fourth quarter and 9 gross (9.0 net) commenced
production in December 2012.
Three gross (2.5 net) wells were drilled in late 2012 and will be
completed and placed on production in January 2013. All of the Company's Slave
Point horizontal wells are fracture stimulated using gelled water
to place the frac sand (proppant) in the reservoir. As a
result, our experience indicates that each individual well's peak
oil production rate is not observed until it has been on production
for approximately two months.
The 2012 year was extremely busy for
Pinecrest. Record activity, record production volumes and the
commissioning of our first operated waterflood scheme are all
positive indicators looking forward into 2013. As a greater
proportion of the Company's production base becomes pressure
maintained, material positive change is expected to our overall
production decline profile. The combination of the Company's large
drilling inventory, industry leading production netback, improving
capital efficiencies and attenuated corporate decline rate will
drive the growth profile of the Company for the foreseeable
future.
Advisory
The information in this press release
contains certain forward-looking statements. These statements
relate to future events or our future performance. All statements
other than statements of historical fact may be forward-looking
statements. Forward-looking statements are often, but not always,
identified by the use of words such as "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe", "would" and similar expressions. In
particular, forward looking statements in this press release
includes, but is not limited to: Pinecrest's capital program and
business objectives, Pinecrest's budget, oil recovery rates, the
effects of waterfloods on recovery factors, decline rates and type
curves for wells, production rates, exit rates for production and
bank debt, downspacing opportunities, the quantity of reserves, and
projections of market prices and costs. These statements involve
substantial known and unknown risks and uncertainties, certain of
which are beyond Pinecrest's control, including: the impact of
general economic conditions; industry conditions; changes in laws
and regulations including the adoption of new environmental laws
and regulations and changes in how they are interpreted and
enforced; fluctuations in commodity prices and foreign exchange and
interest rates; stock market volatility and market valuations;
volatility in market prices for oil and natural gas; liabilities
inherent in oil and natural gas operations; uncertainties
associated with estimating oil and natural gas reserves;
competition for, among other things, capital, acquisitions, of
reserves, undeveloped lands and skilled personnel; incorrect
assessments of the value of acquisitions; changes in income tax
laws or changes in tax laws and incentive programs relating to the
oil and gas industry; geological, technical, drilling and
processing problems and other difficulties in producing petroleum
reserves. Pinecrest's actual results, performance or achievement
could differ materially from those expressed in, or implied by,
such forward-looking statements and, accordingly, no assurances can
be given that any of the events anticipated by the forward-looking
statements will transpire or occur or, if any of them do, what
benefits that Pinecrest will derive from them. Except as required
by law, Pinecrest undertakes no obligation to publicly update or
revise any forward-looking statements.
Statements relating to "reserves" or
"resources" are deemed to be forward-looking statements, as they
involve the implied assessment, based on certain estimates and
assumptions, that the resources or reserves described can be
profitably produced in the future.
Barrels of Oil Equivalent ("boe") may be
misleading, particularly if used in isolation. A boe conversion
ratio of 6MCF:1bbl 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.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release.
SOURCE Pinecrest Energy Inc.