More good newsPress ReleaseSource: Atikwa Resources Inc.On Monday July 18, 2011, 11:40 am EDT
CALGARY, ALBERTA--(Marketwire - July 18, 2011) - Atikwa Resources Inc. ("Atikwa" or the "Company") (TSX VENTURE:ATK - News).is pleased to announce that it has significantly expanded thedevelopment potential of its Roncott property through a rolling optionfarm-in on 22 sections of land contiguous to its producing 7-27 well andthe existing Roncott Field. Atikwa will pay 100% of the costsassociated with the drilling of one vertical well to earn the right toparticipate in a rolling option on a 50/50 basis. The rolling option isdesigned to earn two sections of land for every additional well drilled.
TheCompany's 7-27 well is currently the best producing vertical well inthe pool with stabilized production of approximately 20 barrels per dayover the last year. Based on industry data, management believes that ahorizontal well drilled into a similar quality Bakken reservoir couldproduce from five to seven times that of a vertical well. President SeanKehoe stated: "We are very excited about finally being able to moveforward with this play. We have been working for over a year with anumber of entities in an effort to build a larger position in and aroundour successful 7-27 test well and the main pool. We now have enoughrunning room in a Bakken pool that has a history of producing oileconomically from vertical wells, due to that fact, this should be anexciting horizontal candidate."
The Roncott field in Saskatchewanwas discovered in 1956 as a Bakken formation field that was capable ofproducing economic, 40 degree API oil, from conventional vertical wells.Government data estimates that there is 10 million barrels of oil inplace, however over the life of the pool industry has only extractedabout 8% of that or 800,000 barrels of oil from essentially fourvertical wells. It is that remaining 9.2 million barrels that theCompany plans to target and potentially expand with a horizontaldrilling program.
Vertical wells in this pool will qualify for a50,000 bbl royalty incentive volume with horizontal wells qualifying for100,000 bbl under the same incentive; consequently the Company willonly pay a 2.5% Crown royalty, during this period. The low royalties andthe lighter quality crude oil, combine to give favorable cash netbacksfor production.