CALGARY, ALBERTA--(Marketwire - April 5, 2012) - Blackdog Resources Ltd. ("Blackdog" or "the Company") (TSX VENTURE:DOG) is pleased to provide a comprehensive update on its 2012 winter drilling and recompletion program. In total, the Company did work on 7 wells during the quarter before an early breakup season commenced which has temporarily limited work on some of its ongoing projects.
The Company repaired a pump on a shut-in well (the "Whitebear Well") and returned the Whitebear Well to full production in February, 2012. The Whitebear Well has been shut-in for 18 months and is now back to its historical production levels. The aggregate cost to restart the Whitebear Well was under $15,000. Originally the Whitebear Well repairs were scheduled for completion in the summer of 2011 but were delayed due to severe flooding in the area for several months and again by the lack of available service equipment when the ground finally froze. The Company also intends to reactivate production from two more wells at Whitebear during the summer of 2012. The Company has a 100% Working Interest ("W.I.") in all three of these wells at Whitebear.
The Company repaired pumps on two wells at Woking and recommenced production from these two wells in March, 2012. The first well (5-15) (90.45% W.I.) performed below the Company's expectations in 2011 and was eventually shut-in at the end of 2011 while a technical assessment could be completed. Upon the completion of the technical assessment, the well was brought back online and the Company is very pleased with the increase in production resulting from the addition of the new pump on the well. As a result of this improvement the Company has begun a retrofit of all its down hole pumps at Woking. The second of these wells, (6-21) (53.33% W.I.) was repaired in late March, 2012 and has now been back on production for a couple of weeks. The Company has also seen a significant improvement in production in this well in the short period of time it has been back on production. The Company intends to retrofit pumps on two additional wells post breakup and may retrofit additional shut-in or suspended wells at Woking once a realistic testing period confirming the early results of the retrofitted wells has been verified. The gross capital cost to retrofit both of these wells was approximately $40,000 (net approximately $30,000 to Blackdog).
The Company repaired tubing and pumps on two wells during Q1, 2012 which, based on field reports, brought both wells back to their historic production levels by the end of the quarter. Blackdog has a 55% W.I. in one well and a 50% W.I. in the second well. The Company's portion of the aggregate capital costs for these two work overs was approximately $80,000. The operator of the property at Girouxville recently sold its interest to a third party. Management believes that this will have a long term positive benefit to the property as the new operator considers the property core to its light oil strategy. Blackdog intends to work with the new operator and anticipates achieving improved operating results and lowering operating costs on the property to the benefit of both partners.
Buck Lake, Alberta
The Company commenced commercial flow production from its 9-22-46-6 cardium light oil horizontal well on February 17, 2012, after completion of a pipeline for natural gas and natural gas liquids. After a 10 day flow test period, the partners mutually agreed to equip the well with a pump jack. The pump jack was successfully installed on March 6, 2012. After a one week pumping test, the well partners determined to re-enter the well and retrieve several frac balls that were impeding the production from the well. During the successful removal of the frac balls, load oil was lost into the formation. The well recommenced production on March 17, 2012 and all load oil has now been recovered. The Company anticipates announcing production results after the well has produced at a stabilized rate for a significant period of time. The well is currently producing a combination of light oil which is being trucked off the property for sale, and natural gas and natural gas liquids which are flowing through the Company's pipeline to market for sale.
The Company has a 15% W.I. in the well and in the 3/4 section of land the well is situated on. Management of the Company believes that there are multiple potential future drilling locations available on the land.
In addition in the Buck Lake area, the Company had two cardium light oil drilling targets delayed due to certain negotiations with landowners regarding surface drilling locations during the quarter. The Company has a 15% W.I. in each of these locations and expects the wells will be drilled later in 2012 or in the winter of 2013.
The Company was approached by the operator of its suspended gas well (3-29-48-3) (15% W.I.) to abandon the current zones and to go up hole and perforate and fracture stimulate another target gas zone. Blackdog would normally not participate in a gas well but in this circumstance with a pipeline already built and tied into the well and the logs looking positive in the target formation and the potential production reward for such a small capital investment, the decision was made to participate. The frac was successful and the well tested at rates of approximately 500 mcf or 83 boepd per day (net 75mcf or 13 boepd to Blackdog) plus natural gas liquids rate of approximately 10-15 barrels per day (net 1-2 to Blackdog). Blackdog's total capital cost for this re-entry was approximately $60,000. The two week mandatory test period on the well has now been completed and the Company has determined to shut-in the well until natural gas prices improve. Management of the Company believes this was a prudent decision to participate in this well as a way to maximize the value of one of its non economic assets and increase the overall reserves and future production of the Company.
The Company has had an active and busy winter season and management of the Company believes these capital investments have added incremental production and reserves to the Company. Management believes the Company is well positioned to continue to grow its production for the balance of 2012 and beyond with its current assets. In addition, the Company continually investigates light oil drilling prospects and current light oil producing assets that are for sale and will not hesitate to add further accretive light oil properties to its portfolio.
Blackdog Resources Ltd is a junior oil and gas company focused on the production of light oil in South East Saskatchewan and Alberta. The Company currently has 27,166, 212 common shares outstanding.
Certain information regarding Blackdog in this news release, including management's assessment of future plans and operations, may constitute forward looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, production, marketing and transportation, loss of markets, volatility of commodity prices, imprecision of reserve estimates, environmental risks, competition from other producers, unexpected decline rates in wells, wells not performing as expected, delays resulting from or inability to obtain 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 foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Blackdog'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). The forward-looking statements or information contained in this news release are made as of the date hereof and Blackdog does not undertake any obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
The term "barrels of oil equivalent" or "boe" may be misleading, particularly if used in isolation. A "boe" conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.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 the accuracy of this release.
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