Press release from Marketwire
Artek Exploration Ltd. Provides Operations Update
Monday, October 22, 2012
CALGARY, ALBERTA--(Marketwire - Oct. 22, 2012) - Artek Exploration Ltd. (TSX:RTK) ("Artek" or the "Company") is pleased to provide the following operational update.
The Company has successfully drilled and completed its fifth of a seven horizontal well program (60% working interest) planned for 2012 at A16-10-88-23W6 at the most northerly end of its Doig natural gas and condensate trend in the Inga area of British Columbia. After a 93 hour in-line production test period, the horizontal well was still cleaning up and flowing from the Doig Formation, over the last 6 hours of the test period, at a restricted average rate of approximately 6.4 mmcf/d of natural gas (31% load C3) and 1,351 bbls/d of condensate, or a total of 2,424 boe/d which is the equivalent of 2,086 boe/d (65% condensate) net of load at a flowing pressure of 1,486 PSI. The well was drilled to a lateral distance of approximately 1,560 meters and was completed with a 16 stage propane fracture stimulation program.
During the third quarter, Artek invested approximately $14.9 million in capital expenditures. The Company invested approximately $2.0 million in land acquisitions in its core areas and approximately $1.0 million in the construction of a sales line at Inga to a deeper cut facility to achieve greater liquids recovery with the remainder being drill related operational expenditures. The Company drilled two horizontal wells (1.2 net) targeting condensate rich natural gas at Inga, B.C., and three vertical wells (1.2 net) targeting Glauconite oil at Leduc Woodbend in Central Alberta. The first Inga horizontal was completed and placed on production in September, while the second is currently flowing back on test as described above. The three vertical wells at Leduc are currently being completed and are expected to be on production by mid-November.
Artek's corporate production in the third quarter, based on field estimates, averaged 2,556 boe/d, of which approximately 37% was oil and natural gas liquids. Third quarter production was impacted by temporary delays associated with weather and mechanical issues experienced during the drilling and completing of the second and third horizontal wells drilled during the second quarter at Inga, the details of which were released in prior communications. Remedial work on the third horizontal well is underway and management is targeting to finish the completion operation for this well during the fourth quarter.
At this time, four of the seven 2012 planned horizontal wells at Inga are on production. The Company is currently drilling its final two horizontal wells of its 7 well horizontal program targeting condensate rich natural gas. Both wells are anticipated to be drilled in early November and completed and on production between late November and early December of this year. At Leduc Woodbend in Central Alberta, the Company recently completed the drilling of its fourth vertical well (0.4 net) in its Glauconite oil development program which it expects to complete and have on production in November. All of these wells are targeted to be on production by year end, with 2012 exit production forecast to be approximately 4,000 boe/d, comprised of approximately 37%-40% oil and natural gas liquids.
The Company is scheduled to release its 2012 third quarter financial results after close of market on November 7, 2012.
Forward Looking Statements: This document contains forward-looking statements. Management's assessment of future plans and operations and the timing thereof, future results from operations, production estimates including 2012 exit production, commodity mix, initial production rates, drilling plans, timing of drilling and tie-in of wells, productive capacity of new wells, and financial capacity to carry out its planned 2012 capital program may constitute forward-looking statements under applicable securities laws and necessarily involve risks including, without limitation, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, incorrect assessment of the value of acquisitions, failure to realize the anticipated benefits of acquisitions, the inability to fully realize the benefits of the acquisitions, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward looking statements. Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Artek believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements 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 document and other documents filed by the Company, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Artek operates; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; Artek's ability to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and Artek's ability to successfully market its oil and natural gas products. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Company's website (www.artekexploration.com). Furthermore, the forward looking statements contained in this document are made as at the date of this document and the Company does not undertake any obligation to update publicly or to revise any of the included forward looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
BOE Conversions: Barrel of oil equivalent ("BOE") amounts may be misleading, particularly if used in isolation. A BOE conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel. This conversion ratio of six thousand cubic feet of natural gas to one barrel is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value.
Test results and initial production rates: the pressure transient analysis or well test interpretation has not been carried out and thus certain of the test results provided herein should be considered to be preliminary until such analysis or interpretation has been completed. Test results and initial production rates disclosed herein may not necessarily be indicative of long-term performance or of ultimate recovery.
Artek is a crude oil and natural gas exploration, development and production company headquartered in Calgary, Alberta, Canada. Artek's shares trade on the Toronto Stock Exchange under the symbol "RTK".
FOR FURTHER INFORMATION PLEASE CONTACT:
The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.Contact Information:
Artek Exploration Ltd.
President and Chief Executive Officer
Artek Exploration Ltd.
Vice President Finance and Chief Financial Officer