Pinecrest Energy Buyout Will BE Very Profitable......l
effects of commodity price derivative contracts
Operations Update and Outlook
During the first quarter, Pinecrest successfully undertook remediation efforts on certain producing wells and deferred capital spending on all new drilling. The Company's current strategy is to limit capital spending while applying excess cash flow towards reducing indebtedness and monitoring waterfloods and the results of its remediation efforts.
The Pinecrest technical team, with the assistance of a third party technical expert, has identified some production impediments which they believe are the cause of the reduced production in its horizontal wells. With an understanding of these reservoir effects, the Company developed remediation plans and implemented treatments on selected vertical Slave Point producers with initial results that are encouraging. The wells that were effectively stimulated have sustained an increase of 1.5 to 2 times production three months later.
Based on these positive results, Pinecrest conducted remediation work on certain horizontal wells. Different treatment techniques with varied implementation costs and benefits were completed. Production from the wells has continued to improve. The wells are being monitored and further work is being planned for the balance of the Company's vertical and horizontal well inventory based on the results of these operations. The average treatment cost was $115,000 per well.
An encouraging initial result has been obtained from a treatment conducted on the Evi #2 Waterflood 102/03-32-087-11W5/0 producing well. The treatment improved the oil production rate from less than 10 barrels per day to an average of over 40 barrels per day, while reducing the watercut from 96% to less than 84%. Total oil production from the Evi #2 Waterflood is now up to an average of over 120 barrels per day from a low of 40 barrels per day in February, 2014. This result validates the technical team's conclusions regarding the cause of the changes in the oil production rate.
Read more at https://www.stockhouse.com/news/press-releases/2014/05/26/pinecrest-energy-inc-announces-its-first-quarter-2014-results#ebPxFL03vKAhuTj1.99