News ReleasePress Release Source: Canadian Spirit Resources Inc.
Canadian Spirit Resources Inc. Demonstrates Gething Production at Farrell Creek
Wednesday March 15, 5:44 pm ET
CALGARY, ALBERTA--(CCNMatthews - March 15, 2006) - Canadian Spirit Resources Inc. (TSX VENTURE:SPI - News; "CSRI" or the "Company") is pleased to announce that it is producing natural gas from its test holes located at c-83-H and b-92-H in the Farrell Creek area of British Columbia. Both of these wells were fracture stimulated in the Gething Formation.
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The b-92-H test hole flowed natural gas at a stabilized rate in the range of 250-300 mcf/d and test hole c-83-H is currently producing natural gas at a rate of 35 mcf/d and increasing.
The water-based stimulation of the c-83-H test hole in December 2005 and the installation of a downhole pump enabled the Company to begin the dewatering process on January 16, 2006. During the initial dewatering period at c-83-H, the gas production valve was kept closed. Since opening the valve on February 28th, the average production rate of natural gas has increased from 5 mcf/d to over 35 mcf/d. At this early stage in the dewatering process, the production data points are trending upward in a pattern typical of water bearing coal formations.
Based on information gathered during the evaluation and fracture stimulation of the c-83-H test hole, the Company revised the stimulation program for the b-92-H test hole in order to minimize water volumes injected into the formation. The b-92-H test hole, drilled and cased in late December 2005, was fracture stimulated in two perforation zones, an upper zone and a lower zone with a retrievable plug isolating the two zones. Production response at the b-92-H test hole has been more immediate with production of natural gas from the upper zone flowing at a stabilized rate in the range of 250-300 mcf/d. The Company has now pulled the retrievable plug and cleaned out the lower zone. Both zones of b-92-H are currently flowing back and over the next few weeks will be assessed to quantify the overall production from the Gething Formation at this location.
Until now, the Company has considered its principal risk to be the productive capability of the Gething Formation. The early production rates from the b-92-H test hole and the upward production trend at c-83-H have, in the Company's view, reduced, although not entirely eliminated this risk. In addition to other objectives, the next stage of operations is designed to confirm the productivity of the Gething Formation over a wider area of the Company's lands.
Over the next several months, the Company will continue to pump water and produce natural gas from both of these test holes in order to more accurately measure the longer-term production rates. Based on this production data and subject to regulatory approval, CSRI is developing a pilot plan to drill and complete additional test holes located in close proximity to both the b-92-H and c-83-H test holes. This pilot phase will focus more on the engineering, operational and marketing aspects of developing a commercial project. Data gathered during this phase will assist in the design of a development program that addresses economic, environmental, stakeholder and regulatory objectives.
Canadian Spirit Resources Inc. is a natural resources company focusing on the identification and development of opportunities in the unconventional gas sector of the energy industry. Since 2002, the mission of the Company has been to develop 1 Tcf of natural gas over a five year period from unconventional resource plays in western Canada. Within three years, the Company has identified several large resource plays, assembled a unique, high working interest land position in over 42,000 gross acres (of which 40,000 are located in British Columbia) and is currently evaluating the productive capability of its principal resource property.
On behalf of the Board of Directors,
Canadian Spirit Resources Inc.
"Phil Geiger"
Phillip D.C. Geiger, President & COO