Aroway Energy Inc ARWJF

Info from IR..........

[cgiffin]

 

Today at 1:40 PM

We have two producing wells at Kirkpatrick Lake.  The first well that we drilled in December 2012  and received  the Maximum Rate Limitation approval with the Alberta Energy Regulator to produce that well at 240 barrels per day continues to perform better than we expected in that the depletion has been about half of what we expected.  This well is now producing approximately 114 barrels per day.  This well is not ‘behaving’ as a typical Ellerslie well would after being on production for almost two years. 

 

The second Ellerslie well is behaving like a typical Ellerslie well and has shown the depletion as expected.  In addition, there is another company with lands close to our producing pool that has been producing and their wells are likely from the same pool.  Hence the production from this second well has been steadily declining faster than expected.  This well is now doing 38 barrels per day.

 

Even though the wells are 200 meters away from each other, the initial well depletion continues to be unexpected, and better than forecast. These wells need to be produced for 6-8 months before we can determine what’s going on  and possibly apply for an approval to drill any further wells. The combined production of 152 boe at Kirkpatrick Lake will likely decline by at least 30% per year going forward.

 

Kerrobert is 100% exploratory, and further, unfortunately the company doesn’t have any sure things, when it comes to any drilling or production or for any other investment it makes. The company provides production guidance based on previous well results and substantial geological and geophysical homework, it doesn’t however provide production promises.

 

In terms of the debt, the company has changed the manner in which it pays back the debt, in this case over the next 10 months to provide the company with additional cash flexibility to possibly pursue some land sales on its prospects, provided the land costs are reasonable.