Spyglass restarts 800 bopd of production at Dixonville Ticker Symbol: C:SGL
Spyglass restarts 800 bopd of production at Dixonville
Spyglass Resources Corp (C:SGL)
Shares Issued 128,076,720
Last Close 6/27/2014 $1.75
Monday June 30 2014 - News Release
Mr. Tom Buchanan reports
SPYGLASS RESOURCES CORP. PROVIDES DRILLING UPDATE AND RESTARTS DIXONVILLE FIELD AFTER PIPELINE INCIDENT
Spyglass Resources Corp. has restarted production from the Dixonville field after a pipeline incident. The company has also provided a drilling update, including details on the company's recent tie-in of a light oil well at Cessford in Southern Alberta, the completion and tie-in of a natural gas well in the Cadomin at Noel, and the Halkirk-Provost 10-well drilling program.
Dixonville Incident Update
Effective immediately the Alberta Energy Regulator (AER) has rescinded the shut in order for the Dixonville field and Spyglass has restarted approximately 28 percent (800 bbl/d) of oil production. Additional production will be restored as pipeline inspection and remediation continue.
In early May the company began conducting in-line inspections of the Dixonville gathering system. The recent pipeline incident occurred on a pipeline that was scheduled for inspection within the next two months. As a result of this incident, Spyglass will only restart portions of the gathering system that have passed inspection or where remediation work has been completed. Based on the current work schedule the field is expected to return to approximately 75 percent of capacity within the next three weeks. Complete inspection and remediation of the gathering system is expected to take 10 to 12 weeks at which time the field will return to its full capability.
The reduction in Dixonville production as a result of pipeline incidents and ongoing integrity work is expected to impact the cash flow of the company by approximately $6.5 million divided between the second and third quarters.
Drilling Update
In mid-April, Spyglass commenced drilling a horizontal Cadomin natural gas well at Noel. The well was completed earlier than anticipated, beginning post frac flow-back in late June. The current flow rate into the pipeline from the well is over 1,000 boe/d of natural gas. The Company has an extensive drilling inventory at Noel, with over 85 follow up Cadomin horizontal locations identified.
Spyglass previously announced the successful completion of 1 (1.0 net) Glauconite light oil well at Cessford with 24-hour test rates in excess of 1,000 boe/d (65 percent liquids). Given these test rates, facilities are currently being upgraded to accommodate the production from this well and follow up locations. In May, the well was placed on production, however due to third party facility constraints it is producing approximately 330 boe/d. Spyglass will begin drilling two additional Cessford wells in July.
The Company also expects to commence a 10 well horizontal drilling program, targeting Viking light oil, in the Halkirk-Provost area in mid-July.
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