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Press release from CNW Group


Monday, October 04, 2010

CEQUENCE ENERGY LTD. ANNOUNCES OPERATIONAL UPDATE TO WILRICH AND CARDIUM DRILLING ACTIVITY06:01 EDT Monday, October 04, 2010CALGARY, Oct. 4 /CNW/ - Cequence Energy Ltd. ("Cequence" or the "Company") (TSX: "CQE") is pleased to provide an operational update with respect to its Wilrich natural gas and Cardium oil resource plays.Cequence has successfully completed its first Wilrich horizontal well at Simonette (the "Discovery Well"). The well was drilled in August to a total measured depth of 4,416 meters with a horizontal section of 1,637 meters. After 20 days of delay due to weather, the well was completed with a multi-stage water based fracture stimulation over 16 intervals. The well flowed for 72 hours to clean up fracture fluids. Following clean up, the well has been flowing to producing facilities for 100 hours at a facility restricted rate of 8.5 mmcf/d and a wellhead flowing pressure of 1,075 psi. The Discovery well cost $4.8 million to drill and complete and generated approximately $4 million in Deep Gas Royalty Credits and Alberta Drilling Incentives. An equivalent amount of Cequence natural gas has been shut-in at Simonette to accommodate the volumes from the Discovery well that are flowing into the Simonette plant. The Simonette gas plant has available processing capacity and operations are underway to install field compression to de-bottleneck the gas gathering system.Cequence has approximately 120 net sections of land at Simonette including 15 net sections (100% WI) of land directly offsetting the Discovery Well with similar Wilrich potential. With this initial drilling success, management believes that there is the potential for between 30 and 45 additional Wilrich horizontal drilling locations in this area depending on the ultimate spacing required to maximize the resource. The Company believes that with expected drilling and completion costs, the anticipated natural gas production and liquids yield of approximately 25 barrels per million cubic feet, the Wilrich will be one of the leading economic plays in Western Canada. The Simonette area has multi-zone resource potential in a number of other prospective horizons as detailed in the company website.The Company is also pleased to announce that it has successfully drilled its first Cardium oil well at Garrington, Alberta. Completion efforts are currently underway for a multi-stage oil based fracture stimulation over 13 intervals in the 1,250 metre long horizontal portion of the well. Initial results are expected within the next two weeks.Cequence plans to focus the balance of its 2010 and Q1 2011 capital program on oil and liquids-rich natural gas prospects with the objective of testing those prospects which have the potential to add to our growing inventory of resource-style drilling locations for the future.Other Business MattersAfter completion of the plan of arrangement, Cequence has 126.5 million common shares and 10.8 million stock options issued and outstanding with an average strike price of $2.12. As previously disclosed, all performance warrants of Cequence were surrendered as part of the closing of the arrangement involving Cequence and Temple Energy Inc.Forward Looking InformationCertain information included in this press release constitutes forward-looking information under applicable securities legislation. Such forward-looking information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes, such as making investment decisions. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "project" or similar words suggesting future outcomes or statements regarding an outlook. Forward-looking information in this press release may include, but is not limited to, information with respect to: operational decisions and the timing thereof, development and exploration plans and the timing thereof; and future production levels. Forward-looking information is based on a number of factors and assumptions which have been used to develop such information but which may prove to be incorrect. Although the Company believes that the expectations reflected in such forward-looking information is reasonable, undue reliance should not be placed on forward-looking information 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 press release, assumptions have been made regarding and are implicit in, among other things: field production rates and decline rates; the ability of the Company to secure adequate product transportation; the impact of increasing competition in or near the Company's plays; the timely receipt of any required regulatory approvals; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner to develop its business; Cequence's ability to operate the properties in a safe, efficient and effective manner; the ability of the Company to obtain financing on acceptable terms; the ability to replace and expand oil and natural gas reserves through acquisition, development of exploration; the timing and costs of pipeline, storage and facility construction and expansion; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters; and the ability of the Company to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used.Forward-looking information is based on current expectations, estimates and projections that involve a number of risks and uncertainties which could cause actual results to differ materially from those anticipated by the Company and described in the forward-looking information. The material risk factors affecting the Company and its business are contained in the Company's Annual Information Form which is available under the Company's issuer profile on SEDAR at forward-looking information contained in this press release is made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, unless required by applicable securities laws. The forward looking information contained in this press release is expressly qualified by this cautionary statement.Additional AdvisoriesBoes are presented on the basis of one Boe for six Mcf of natural gas. Disclosure provided herein in respect of Boes 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.The Toronto Stock Exchange has neither approved nor disapproved the contents of this press release.%SEDAR: 00023788EFor further information: Paul Wanklyn, President and Chief Executive Officer, (403) 218-8850,; or David Gillis, Chief Financial Officer, (403) 806-4041,;