The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Marketwire

Spartan Oil Corp. Provides Operational Update

Monday, October 03, 2011

Spartan Oil Corp. Provides Operational Update07:30 EDT Monday, October 03, 2011CALGARY, ALBERTA--(Marketwire - Oct. 3, 2011) - Spartan Oil Corp. ("Spartan" or the "Company") (TSX:STO), is pleased to provide an operational update relating to its Keystone Cardium drilling program. Since commencing operations on June 1, 2011, Spartan has drilled a total of 7 (5.66 net) horizontal wells and participated in an additional 2 (0.51 net) horizontal wells targeting Cardium oil at our Keystone property in the Pembina area of central Alberta. Spartan currently has a total of 4 (1.26 net) Cardium horizontal oil wells producing in the Keystone area (3 (0.76 net) of which were drilled prior to June 1). Detailed results for wells that Spartan operates or has an interest in and which have a minimum of thirty days of production are as follows:Average Daily Production (1), (2)Producing DaysHiLowAverageNumber of WellsSpartan Type Well(bbl/d)(bbl/d)(bbl/d)(gross/net)(bbl/d)1 - 30 days2181531754 / 1.2614431 - 60 days1621211453 / 0.7610761 - 90 days142931183 / 0.7684(1) Production numbers are oil only (associated gas and natural gas liquids not included).(2) After recovery of all frac fluids.We are very encouraged by the results we have seen to date at Keystone, with all of the wells that are currently on production exceeding our unrisked type curve for the area by a significant margin. We expect to bring an additional 8 (4.94 net) Cardium horizontal wells on production in the next 30 days. Current production is approximately 750 boe/d (75% oil and liquids).As a result of continued improvement to our drilling and completion techniques and as a result of the operational efficiencies we enjoy through our ownership of extensive infrastructure in the Keystone area, Spartan's well costs have continued to improve. When Spartan originally published guidance on its 2011 capital program in June, our budget was premised upon individual well costs of $3.3 million (all in, on production) with oil fracs. Our actual experience to date is that the wells are costing approximately $2.8 million. In addition, we have recently made the switch to a water based frac system. We expect to realize a cost savings of approximately $200,000 per well as a result of this change, bringing the all in costs for our future Cardium wells to an estimate of $2.6 million per well. Spartan Oil Corp. The Company is engaged in the business of acquiring crude oil and natural gas properties and exploring for, developing and producing oil and natural gas in western Canada. Spartan is uniquely positioned with a significant position in two of the leading oil resource plays in western Canada, being the Cardium light oil play in central Alberta and the Bakken light oil resource play in southeast Saskatchewan.READER ADVISORYThis press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Spartan. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.In the interest of providing Spartan shareholders and potential investors with information regarding the Company, including management's assessment of Spartan's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Spartan believes the expectations reflected in those forward looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward looking statements contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release. Except as required by law, Spartan does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil.FOR FURTHER INFORMATION PLEASE CONTACT: Richard F. McHardySpartan Oil Corp.President & CEO(403) 457-4006(403) 457-4028 (FAX)ORMichelle A. WigginsSpartan Oil Corp.Vice President Finance & CFO(403) 457-4006(403) 457-4028 (FAX)OR1400, 606 - 4th Street SWSpartan Oil Corp.Calgary, Alberta