The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from Marketwire

DeeThree Exploration Ltd. Announces Bakken and Belly River Drilling Results and an Increase in 2012 Guidance

Thursday, March 29, 2012

DeeThree Exploration Ltd. Announces Bakken and Belly River Drilling Results and an Increase in 2012 Guidance08:00 EDT Thursday, March 29, 2012CALGARY, ALBERTA--(Marketwire - March 29, 2012) -NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATESDEETHREE EXPLORATION LTD. ("DeeThree" or the "Company") (TSX:DTX)(OTCQX:DTHRF) is pleased to provide an operational update on its first quarter Bakken and Brazeau Belly River drilling results. DeeThree also announces an increase in its guidance for the 2012. OPERATIONAL UPDATEAs a result of the Company's first quarter 2012 drilling program, current production is approximately 4,000 boe/d (63% crude oil and NGLs). The Company has drilled 9 (8.9 net) wells year to date with three drilling rigs currently operating.Lethbridge BakkenThe IP30 rate of the Company's previously announced (February 14, 2012) Bakken discovery well on its Lethbridge property is 415 bbls/d of oil with an average water cut of 3%. The second Bakken well drilled by the Company in 2012 was drilled to a planned total horizontal length of 1,440 meters and was successfully fracture stimulated with 180 tonnes of sand over 18 stages using an energized water based system. After stimulation, this well has been flowing for approximately three days with a current flow rate of approximately 800 bbls/day oil with a water cut of 3%. Brazeau Belly RiverThe IP30 rate of the Company's previously announced (January 10, 2012) Belly River well on its Brazeau property is 480 boe/day (83% oil and NGLs). The Company drilled and completed 3 gross (2.8 net) Belly River oil wells in the first quarter of 2012 with a fourth well currently drilling. All three wells drilled year to date have recently come on-stream with results exceeding internal type curve expectations highlighted by the last well which tested at a stabilized rate of 450 boe/d (75% oil and NGLs) after a seven day test. The Company plans to test a different sand interval within the Belly River package in at least three of the eight wells currently planned to be drilled by the Company on its Brazeau property in 2012. The Company's oil and gas reserves as at December 31, 2011 do not include any reserves associated with these newly targeted Belly River sands intervals.INCREASED 2012 GUIDANCEDue to the success of the Company's Bakken drilling program and the completion of the $17.3 million dollar flow through financing announced on March 27th, 2012, the Board of Directors has approved an increase to the 2012 capital expenditures budget from $57 million to $82 million. The increase in the capital budget will primarily target capitalizing on the recent Bakken success in the Lethbridge area by drilling 11 (11.0 net) wells throughout the year, accelerating the pace of its exploration and development of this exciting resource play opportunity. The Company will continue with its plans to drill 8.0 gross (7.3 net) wells in the Brazeau area throughout 2012 keeping one rig in operation in the area. As a result, 2012 exit production is expected to increase from the previously announced 4,300 boe/d (61% oil and NGLs) to approximately 5,000 boe/d (70% oil and NGLs). Year end debt levels are expected to be approximately $46 million on projected fourth quarter cash flow of approximately $14 million representing and annualized debt to cash flow ratio of 0.8 at year end. This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction. Reader Advisory Forward-Looking Statements. Certain statements contained in this press release may constitute forward-looking statements. These statements relate to future events or DeeThree's future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. 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. DeeThree believes that 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 included in this press release should not be unduly relied upon by investors. These statements speak only as of the date of this press release and are expressly qualified, in their entirety, by this cautionary statement. In particular, this press release contains forward-looking statements, pertaining to the following: projections of market prices and costs, supply and demand for oil and natural gas, the quantity of reserves, oil and natural gas production levels, capital expenditure programs, treatment under governmental regulatory and taxation regimes, expectations regarding DeeThree's ability to raise capital and to continually add to reserves through acquisitions and development, and projections of market prices and costs. With respect to forward-looking statements contained in this press release, DeeThree has made assumptions regarding, among other things: the legislative and regulatory environments of the jurisdictions where DeeThree carries on business or has operations, the impact of increasing competition, and DeeThree's ability to obtain additional financing on satisfactory terms. DeeThree's actual results could differ materially from those anticipated in these forward-looking statements as a result of risk factors that may include, but are not limited to: volatility in the market prices for oil and natural gas; uncertainties associated with estimating reserves; uncertainties associated with DeeThree's ability to obtain additional financing on satisfactory terms; geological, technical, drilling and processing problems; liabilities and risks, including environmental liabilities and risks, inherent in oil and natural gas operations; incorrect assessments of the value of acquisitions; competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel. Well test results should be considered preliminary until pressure transient analysis has been completed. In addition, well test results are not necessarily indicative of long-term performance or of ultimate recovery. This forward-looking information represents DeeThree's views as of the date of this document and such information should not be relied upon as representing its views as of any date subsequent to the date of this document. DeeThree has attempted to identify important factors that could cause actual results, performance or achievements to vary from those current expectations or estimates expressed or implied by the forward-looking information. However, there may be other factors that cause results, performance or achievements not to be as expected or estimated and that could cause actual results, performance or achievements to differ materially from current expectations. There can be no assurance that forward-looking information will prove to be accurate, as results and future events could differ materially from those expected or estimated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. . Except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements.BOE Presentation. References herein to "boe" mean barrels of oil equivalent 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: 1 bbl is based on an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.We seek Safe Harbor.FOR FURTHER INFORMATION PLEASE CONTACT: Martin CheyneDeeThree Exploration Inc.President and Chief Executive Officer(403) 263-9130