CALGARY, ALBERTA--(Marketwire - Feb. 17, 2012) -
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY UNITED STATES NEWS SERVICES.
3MV Energy Corp. ("3MV" or the "Company") (TSX VENTURE:TMV) is pleased to provide an Operational Update on its Viking Oil Pool Discovery near Fiske, Saskatchewan, Announces Director Appointments, Officer Appointments and reports Stock Option Grants
Strategy and Technology Overview
3MV has assets throughout west central Saskatchewan's Viking oil play, including its most recent discovery and oil pool development near Fiske, which is located 60 kilometers east of Kindersley, SK. 3MV also focuses on the development and application of new earth science and oilfield technologies in all aspect of the Company's operations., 3MV is using both 2D and 3D proprietary seismic programs to map the geology of the Fiske play. The Companies horizontal wells also utilize multi-stage, high pressure fracture stimulation technology. 3MV's unique fracturing method minimizes the use of fracturing fluids during the fracturing process which reduces both cost and environmental impact.
3MV drilled a horizontal Viking discovery well near Fiske, SK in September, 2011. Following the completion, 3MV ran a five day production flow test that shows hourly production rates between 6.4 to 22.1 bbl per hour, and up to 377 bbl of fluid per day when extrapolated to a 24 hour basis. Once put on production, this well produced in excess of 150 bbl/d of oil for the first 7 full production days, with sustained oil production for the first month of over 100 bbl/d. This horizontal discovery well continues to produce with above average oil production rates compared to other Viking multi-stage, high pressure fracture stimulated wells in the greater Kindersley area. 3MV has followed up on the success of this discovery well by drilling an additional five (5.0 net) wells which have all achieved positive results.
At Fiske, 3MV controls more than 24,000 net acres of land. The Company has licensed 20 wells as a follow up to its initial drilling success; constructed 7.9 kilometers of pipeline and is in the process of building a GritHog tank treating system to treat its API 35degree oil. This pipeline and tank battery construction will mitigate downtime due to spring break up.
Recently 3MV completed a 3rd party independent geological study of the prospective reservoir component occurring at its Fiske discovery area. Based on area geological review of sample cuttings and cores, modern techniques in facies modeling and mapping reveal a 200-2500m wide prospective-fairway of marine hyperpycnal sandstones which extend across the region. Formation permeability reaches at least 350 mD within the fairway, which is over an order of magnitude higher than the regional 17 mD average in the conventional Viking play.
3MV is currently conducting a proprietary 3D seismic program of approximately 20 square kilometers to add to its 6.4 square kilometers of existing proprietary 3D seismic and 28.2 kilometers of existing proprietary 2D seismic.
The Company realized netbacks for our first horizontal well at Fiske of $65.19/BOE. The Company estimates a payout of its average Fiske wells in 8.1 months per well which contribute to a Fiske recycle ratio of 3.83 on a 2P basis. Prior to the Company's exploration at Fiske, 3MV's average 800 meter horizontal leg well cost in the Dodsland area was $548,000 per well to drill, case, complete and equip a horizontal multi staged fractured well. Due to the scientific nature of the discovery well, surface access in the Fiske area and additional costs for winter drilling conditions, 3MV's well cost for a horizontal multi stage fractured well in the Fiske area is $850,000. The Company expects these costs to decrease as the field is developed, and drilling begins in warmer temperatures.
Director and Management Appointments and Stock Option Grants
On January 30, 2012, in conjunction with the completion of the qualifying transaction, 3MV appointed Alex Francoeur to its Board of Directors.
On February 10, 2012 3MV appointed Brian Radiff as Vice President, Corporate Development and Tom Campbell as Vice President, Land.
3MV's current management team is comprised of:
Douglas McKinnon - President, CEO & Director
Since 1982 Mr. McKinnon has been an executive officer or director (or both) of several oil and gas companies. His career has involved projects throughout Western Canada, the US and Colombia. Mr. McKinnon is also the sole proprietor of Stoneworx Earth Sciences Ltd., a consulting firm operating in Canada since 1982.
Billy Abbey - CA, CFO & VP, Finance
Mr. Abbey joined 3MV in August of 2011 as the VP of Finance and shortly thereafter was appointed to the position of CFO of the company. Prior to 3MV, Mr. Abbey was a Senior Auditor with KPMG LLP Calgary and worked with a variety of public and private oil & gas companies.
Stacey Majchrzak, Chief Operating Officer
Mrs. Majchrzak was first on the Operations team at 3 Martini Ventures from 2008 until it was acquired by 3MV in June 2011. Shortly thereafter she was appointed to the role of COO of 3MV in October 2011. Prior to 3 Martini, Majchrzak was part of the Reece Energy Exploration Corp. operations team.
Brian Radiff - VP, Corporate Development
Mr. Radiff joined 3MV as the Communications Officer in April, 2011. He brings over 10 years of communications and investor relations experience to 3MV, including 5 years at Reece Energy Exploration Corp. as the Investor Relations Manager and at Bryan Mills Iradesso as a Senior Communications Advisor.
Tom Campbell - VP, Land
Mr. Campbell joined 3MV in August, 2011. With a Land Administration Certificate from SAIT in 2008 and several years' experience in real estate and property management and has successfully applied his knowledge and skills in these fields to Petroleum Land Management.
Geoff Da Silva, CA - Controller
Mr. Da Silva joined 3MV in November 2011. He now serves as the Company's Controller and brings 4 years of financial reporting experience to 3MV. Prior to joining 3MV in 2011, Mr. Da Silva worked as a manager at KPMG LLP in Calgary.
The current members of 3MV's Board of Directors are:
Doug McKinnon, President, CEO & Director since March 2010
Ron Baba, Q.C., B. Comm., Director since March 2010
Mr. Baba is a corporate commercial lawyer practicing for the past 33 years and has been involved in a variety of outside ventures in the areas of oil and gas, real estate development and enterprise software.
Dallas Duce, Director since November 2010
Mr. Duce brings extensive oilfield management and operations experience as a former CEO of a private Oil company and director of another public company.
Donald Fairholm, CA, Director since March 2010
Mr. Fairholm is the principal of Fairholm & Company Chartered Accountants and is currently a director of Bevo Agro Inc., and a private oil company Sino Western Petroleum Inc.
Alex Francoeur, P.Geol, Director since January, 2012
Mr. Francoeur has been a professional geologist in Alberta since November 2003 and has been the President of his private consulting company, Serpa Petroleum Consulting Ltd., since 1996. He received a Bachelor of Science degree (Geology) in 1979, from Concordia University in Montreal, Quebec, and has been working in the Western Canadian Sedimentary Basin since September 1980.
Rod Wilmer, CFA, Director since January 2012
Mr. Wilmer is currently the CEO & Managing Director of Newedge Canada Inc., an Investment Dealer. Mr. Wilmer has acted as a corporate director for public and private companies including ExAlta Energy Inc and HomeAway.
George Sereggela, Director since June 2011 (i)
Mr. Sereggela is an independent businessman from Estevan, Saskatchewan with interests in several property and casualty insurance brokerages in Saskatchewan. Mr. Sereggela is also a former practicing lawyer.
Jim Boyle, Director since January 2012 (i)
Mr. Boyle is the founding partner of Boyle & Co. LLP, where he practices exclusively in the area of securities law. Boyle is currently also a director of NWM Mining Corporation; a TSXV listed gold exploration and development company with properties in Mexico.
(i) Messrs.', Sereggela and Boyle are members of the Board of 3MV's wholly owned operating subsidiary, 3MV Operations Inc.
3MV issued 250,710 stock options to management and employees, 86,310 stock options to its Board of Directors and 73,980 stock options to consultants of the Company on February 13, 2012.
The securities offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements. This news release does not constitute an offer to sell or the solicitation of any offer to buy nor will there be any sale of these securities in any province, state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such province, state or jurisdiction.
Certain statements in this news release constitute forward-looking statements. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by 3MV. Although 3MV believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because 3MV can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures.
The forward-looking statements contained in this document are made as of the date hereof and 3MV undertakes no 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.
For the purpose of calculating unit costs, natural gas volumes have been converted to a barrel of oil equivalent ("BOE") using six thousand cubic feet equal to one barrel unless otherwise stated. A BOE conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). BOEs may be misleading, particularly if used in isolation.