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Press release from CNW Group

Winstar Provides an Update on Operations

Monday, November 07, 2011

Winstar Provides an Update on Operations09:00 EST Monday, November 07, 2011CALGARY, Nov. 7, 2011 /CNW/ - ("Winstar" or "the Company") (TSX: WIX) is pleased to provide preliminary operational updates on field activities in southern Tunisia and Romania as well as comments regarding the recent elections in Tunisia.TUNISIA: Chouech Essaida Silurian #1 ("CS Sil #1") production start-up (100% working interest)Installation of the natural gas processing plant at the CS Sil #1 well site has been completed and the well was placed on production on October 27, 2011. There have been frequent production interruptions as operations staff at the facility continue to work through various start-up issues associated with processing and measuring the relatively rich natural gas stream. Additionally, delivery of certain parts, critical for the gas plant's operation, were held up in customs due to a temporary localized labor strike and STEG, the Tunisian state electricity and natural gas utility company, has experienced an operational outage at their El Borma facility where Winstar delivers its gas from the Chouech Essaida concession.  These issues have been largely resolved as of this week and the Company expects that gas sales from the CS Sil #1 facility and the rest of the Chouech Essaida concession should resume shortly.  In the interim, the well has been producing water-free condensate at a consistent daily rate of 500 bbls/day. Based on the gas/oil ratio and production parameters from the original well test, the Company estimates that the well is also producing 450 - 550 boepd of natural gas at a steady wellhead pressure of 1620 psi (pounds per square inch) and a choke of 22/64 inch. A further update will be provided when the Company releases its financial results for the third quarter of 2011 on November 10, 2011.Chouech Essaida Silurian #10 ("CS Sil #10") (100% working interest)The CS Sil #10 well commenced drilling on October 10, 2011. The 4,450 meter well is forecast to be drilled in 45 days at an estimated cost of $15-$16 million including the anticipated $5 million completion and testing program. The well's dual exploration objectives are the Triassic and Silurian reservoirs, similar to those discovered in CS Sil #1. Drilling operations for this well are currently on time and on budget and over the past weekend the well was drilling ahead at a depth of 3,600 meters. Provided the operation does not encounter any unforeseen delays, the well should reach total depth by the middle of November and testing of any prospective zones could start in early December.Chouech Essaida #8bis ("CS #8bis") (100% working interest)Full testing of the three potential zones in the CS #8bis well has been completed with the following results:Test Number &FormationPerforated Intervals (meters)Hydrocarbon Liquids(bbls/d)Natural Gas(Mcf/d)Total (boepd)Water- cut (%)FlowingWellhead Pressure (psi)Comments1 2462.0-2462.725-25800swabbing2 2447.5 - 2448.733528538258200Flowing on1/2" choke3 2426.5 - 2428.0806001805455N2/coiledtubingassistedTotal 440885587   The well has been placed on production and is currently flowing at a stabilized rate of approximately 300 boepd from the middle zone (test #2 in the above table). The Company believes that current production rates for the well could be increased with the installation of a down-hole electrical pump.  The required workover to install this pump is expected to be completed by the end of November.Chouech Essaida #12 ("CS#12")(100% working interest)The CS #12 well reached a total depth of 2,500 meters on September 23, 2011 several days ahead of forecast and below the budgeted cost. Following testing, two zones proved to contain hydrocarbons and both zones will require artificial lift to produce.  Equipment is currently being sourced to measure the economic potential of these two zones and it is currently anticipated that installation and testing with a pumping system will commence in December.ROMANIAThe Company's first drilling campaign in Romania, consisting of two exploration wells in the Satu Mare exploration block, will commence in mid-November.  The first well, Madaras 109, is a 1,800 meter test of an oil zone previously encountered in a nearby offset well. The second well is expected to reach a total depth of 1,550 meters and will test various gas zones encountered in offset wells. Winstar will operate and pay 100% of the cost of these wells to earn a 60% working interest as part of the Company's work commitment under the Farm-in Agreement with Rompetrol of Romania.TUNISIAN ELECTIONSOn October 23, 2011, Tunisia conducted a well publicized and important election process.  The newly elected Constituent Assembly is mandated with writing a new constitution and has the authority to appoint a new government which is intended to govern until further elections can be held in the future.  The media have reported a general and international consensus to the effect that these elections were peaceful, well organized and with a relatively strong participation. As such, they attest to the Tunisian people's willingness and preparedness to transform the country.  The moderate Islamic Ennadha party won the largest support receiving 90 out of 217 seats in the Constituent Assembly.Throughout the significant events of late 2010 and in 2011, which included the abrupt departure of the former President in January 2011, the day to day production operations of the Company have been largely unaffected due to the strong commitment and dedication of the Company's Tunisian employees.  Some minor delays have occurred, most notably the logistical challenges associated with moving equipment to the remote, southern location of Winstar's Chouech Essaida concession.  These delays have been a challenge and may continue in the foreseeable future but the Company will continue to manage any such issues so as to limit or avoid any material impact on its operations and assets.BOE Reference herein to "boe" mean barrels of oil equivalent and is derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil.  Boe may be misleading, particularly if used in isolation.  A boe conversion ratio of 6 Mcf to 1 bbl is based upon an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.  References herein to "boepd" means barrels of oil equivalent per day.Forward-Looking StatementsThis press release contains certain forward-looking statements. These statements relate to future events or future performance of the Company. When used in this press release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "predict", "seek", "propose", "expect", "potential", "continue", and similar expressions, are intended to identify forward-looking statements. These statements involve 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. Such statements reflect the Company's current views with respect to certain events, and are subject to certain risks, uncertainties and assumptions. Many factors could cause Winstar's actual results, performance, or achievements to materially differ from those described in this press release. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this press release as intended, planned, anticipated, believed, estimated, or expected. Specific forward-looking statements in this press release include, among others, statements pertaining to the following: factors upon which Winstar will decide whether or not to undertake a specific course of action; and estimated volumes and timing of future production; business plans for drilling, exploration and development; and other expectations, beliefs, plans, goal, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. The risks to which the Company is subject include those of the oil and gas industry in general including operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; volatility in global market prices for oil and natural gas; general economic conditions; competition; liabilities and risks, including environmental liability and risks, inherent in oil and gas operations; uncertainties as to the availability and cost of financing and changes in capital markets; alternatives to and changing demand for petroleum products; and changes in legislation and the regulatory environment, including uncertainties with respect to the Kyoto Protocol. Furthermore, statements relating to "reserves" or "resources" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions to the effect that the resources and reserves described can be produced profitably in the future. The forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. These statements speak only as of the date of this press release. The Company does not intend and does not assume any obligation, to update these forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.Winstar Resources Ltd. is a Calgary based junior oil and gas company, which explores for, develops, produces, and sells crude oil, natural gas liquids and natural gas in Tunisia and Romania. Winstar's common shares trade on the Toronto Stock Exchange under the symbol WIX.For further information: Mr. David Monachello President Phone: +1 403 513 4200 E-mail : dmonachello@winstar.ca Or Mr. Bradley Giblin Chief Financial Officer Phone : +1 403 513 4207 E-mail : bgiblin@winstar.ca Or Mr. Charles de Mestral Chief Executive Officer Phone: +41 22 361 14 45 E-mail: cdemestral@winstar-resources.ch (Note: Mr. de Mestral is based in Europe, in a time zone eight hours ahead of Calgary time)