Canamax Energy Ltd. ("Canamax" or the "Company") (TSX VENTURE: CAC) is pleased to announce results of the Company's recent drilling program as well as an update on the infrastructure build at Flood.
Drilling Results
During September through early December, Canamax successfully drilled and completed one (net 0.7) horizontal Cardium oil well at Wapiti and six (net 6.0) vertical Montney oil wells at Flood.
Wapiti
The new Wapiti horizontal Cardium well at 04-15-67-08 W6 (in which Canamax has a 70% working interest) was fracture stimulated in early December with all of the load fluid being recovered during the first 108 hours of a 262 hour flowback and test period. After recovery of the load fluid, the well was flowed for an additional 154 hours at a gross rate of 679 bbl/d of 41° oil and 1.2 million cubic feet of natural gas per day with no water, resulting in gross production of 880 boe/d (616 boe/d net) over that period. These test results are not necessarily indicative of long-term performance or ultimate recovery.
Canamax management anticipates that the initial 30-day average gross production rate ("IP 30") for the 04-15 well will be similar to, or better than, the IP 30 rate of the Company's horizontal Cardium well at 09-21-67-08 W6 (also a 70% working interest) which was brought on production in March of this year. The 09-21 well had an IP 30 rate of 405 boe/d gross (284 boe/d net), comprised 86% oil and natural gas liquids, and 14% natural gas. The new 04-15 well has now been shut-in pending construction of tie-in facilities (targeted for late January).
Canamax has a 70% interest in 2.25 sections at Wapiti and an additional five Cardium horizontal drilling locations have been identified on this acreage.
Flood
At Flood, the six recently drilled Montney oil wells have now been tied into the newly constructed gathering facilities in the area. The aggregate IP 30 rate from the six new wells is expected to be approximately 375 boe/d (80% oil and 20% natural gas) based on average IP 30 type curves of previous wells drilled at Flood. The installation of the new gathering infrastructure connects all Canamax producing wells at Flood directly to the central battery and water disposal system eliminating significant trucking costs. Gathered solution gas is connected through the facilities to the Company's compressor station and pipeline sales point thereby eliminating flaring and enhancing revenues. Future wells can easily connect to the gathering infrastructure enhancing overall well and project economics.
CEO Brad Gabel commented, "The completion of the gathering system at Flood is an important milestone for the property and Canamax. The significant operating cost savings and enhanced drilling economics are especially important during low oil price periods. Longer term, these facilities will play key roles in potential, field-wide waterflood implementation."
Outlook
Three additional wells had been budgeted to be drilled prior to December 31 (two at Flood and one at Retlaw). However, these wells have been deferred into 2015 given the facility construction at Flood and current uncertainty surrounding oil prices. Canamax is now reviewing its plans for 2015 given the current oil price environment and expects that current stresses on many junior oil companies will generate opportunities to continue strategic consolidation activities. With its strong balance sheet, Canamax is in a favorable position should low prices persist.
About Canamax
Canamax is a junior oil and gas company in the business of consolidating micro-cap oil and gas companies and exploiting low risk development opportunities in the Western Canadian Sedimentary Basin.