CALGARY, ALBERTA–(Marketwire – Jan. 6, 2011) –
NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Storm Resources Ltd (“Storm”) (TSX VENTURE:SRX) and its partner, Storm Gas Resource Corp (“SGR”), are pleased to announce initial gas flow rates from the first horizontal well drilled in the Muskwa and Otter Park gas shales on their joint lands in the Horn River Basin in northeastern British Columbia.
In October 2010, the 1st horizontal at D-9-D/94-P-12 (60% SGR, 40% Storm) was drilled to a total depth of 4,300 metres with a 1,750 metre horizontal section in the Muskwa and Otter Park shales. Completion of the well commenced in early December 2010 and consisted of 12 fracture treatments with each being approximately 300 tonnes of sand and 2,900 cubic metres of water (total sand pumped was 3,500 tonnes and total water pumped was 35,000 cubic metres or 220,000 barrels). Total cost of the completion is expected to end up at $9 to $9.5 million.
The well has now been flowed for 76 hours on clean-up with results as follows:
- Gas rate has been restricted and has averaged 8.8 mmcf per day during the clean-up period (cumulative gas production 28 mmcf).
- The most recent gas rate was 9.1 mmcf per day at a flowing casing pressure of 8,000 kPa.
- The water used in the fracture treatments is being recovered at a rate of 1,600 barrels per day or 255 cubic metres per day, with cumulative water recovery to date being 1,050 cubic metres, representing 3% of the water pumped in the fracture treatments.
Tubing is now being installed in the wellbore and the well will be flow tested for an additional 7 to 10 days in order to gain additional information regarding the gas rate and flowing pressures. Once testing has been completed and assuming results are as expected, construction of the associated facility and pipelines will begin and first gas to sales may occur as early as April 2011. Although the initial flow rate is very encouraging, it is expected that at least 3 to 6 months of production history will be required before a reserve estimate can be provided and before longer-term production performance can be predicted.
A 2nd horizontal well was drilled in December 2010 at C-29-D/94-P-12 (60% SGR, 40% Storm) to a total depth of 4,400 metres which includes a 1,900 metre horizontal section.
SGR and Storm are 60:40 working interest partners and jointly control over 95 gross sections in the Horn River Basin, of which 19 gross sections have been identified as a core project area. In addition to its direct working interest, Storm holds a 22% ownership position in SGR.
Certain information in this press release contains forward-looking information that involves risk and uncertainty. For this purpose, any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements often contain terms such as “may”, “will”, “should”, “anticipate”, “expects” and similar expressions. In particular, this press release contains forward-looking statements pertaining to the following: the expected cost to complete the horizontal at D-9-D/94-P-12 (the “D-9 Horizontal”); flow testing of the D-9 Horizontal; facility and pipeline construction associated with the D-9 Horizontal; and anticipated timing of gas sales and reserve estimates. Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. The Company assumes no obligation to update forward-looking statements should circumstances or management’s estimates or opinions change. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
THIS NEWS RELEASE is not for dissemination in the United States or to any United States news services. The common shares of the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold in the United States or to any U.S. person except in certain transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws.