Some updates came out today. I guess the stock is down slightly as the market didn't like some of the news. I am guessing the part about Kaybob South? Can you guys read and comment please. Looks like a set back on one of their projects, but seems as they are addressing the matter. Still looks way undervalued to me. All opinions welcome. Thanks.
Release below. Forward looking and cautionary statements removed at the bottom to save space.
WestFire Updates Operating Results for Three Months Ended September 30, 2011
Last Update: 10/26/2011 4:11:49 AM
CALGARY, ALBERTA, Oct 26, 2011 (Marketwire via COMTEX) -- WestFire Energy Ltd. ("WestFire" or the "Company") (WFE) is pleased to provide an operational update on its third quarter 2011 activities.
Drilling
The three months since acquiring Orion Oil and Gas Corporation ("Orion") effective June 30, 2011 have been the most active for WestFire in its history. The Company continues to be one of the most active drillers in Alberta during the first nine months of 2011 ranking in the top twenty as identified in the Daily Oil Bulletin. A total of 53 (44.8 net) development wells were drilled consisting of 50 (42.0 net) oil wells and three (2.8 net) gas wells for a 100 percent success rate. The majority of the wells, or 43 (35.0 net) horizontal oil wells, targeted the Viking light oil resource play. Seventeen (16.0 net) wells were drilled at Redwater while six (6.0 net) were drilled at Provost and 20 (13.0 net) wells were drilled in west central Saskatchewan. Of the wells drilled in west central Saskatchewan 14 (7.0 net) were drilled by a joint venture partner at no cost to WestFire.
In addition to its Viking horizontal drilling program, WestFire drilled two (1.8 net) Beaverhill Lake liquids-rich natural gas wells at Kaybob South, three (3.0 net) vertical heavy oil wells at Lloydminster and five (5.0 net) Viking vertical wells to delineate future horizontal drilling potential.
Drilling activities ceased at the end of the third quarter. Two drilling rigs will resume operations on the Viking play at Redwater in November and will continue drilling into 2012.
Viking Oil Resource Play
Production during the third quarter from the Viking drilling program has exceeded expectations. In January 2011, total Viking production averaged approximately 1,000 barrels of oil equivalent per day ("boepd") which represented 32 percent of total Company production. Currently, field-reported Viking production is over 3,300 boepd and accounts for 38 percent of WestFire's total production.
At Redwater, the latest four horizontal Viking oil wells placed on production have initial average rates of approximately 125 boepd with decline rates that are lower than both internal and independent engineering type curves. Meanwhile, the initial average rate of the five most recent horizontal Viking oil wells at Provost is approximately 45 boepd at restricted rates. And at west central Saskatchewan, the initial average rate is 40 gross (20 net) boepd from 11 horizontal Viking oil wells.
Robust production growth, in combination with improved initial rates exhibiting less decline, confirms WestFire's belief that its extensive prospective land holdings on the Viking play will underpin future corporate growth.
Kaybob South
During the quarter the Kaybob South area experienced intermittent production outages caused by forest fires and flooding due to heavy rains. After these curtailments several of the wells did not come back on production at previous rates. Two (1.8 net) gas wells were drilled that did not meet expectations. As a result, the production over the quarter was off by approximately 500 boepd.
WestFire has embarked on a complete technical overhaul of the property including geosciences, engineering and production operations. The Company has utilized this approach successfully in the Viking and will implement the same process at Kaybob South. New technologies will be investigated to optimize and expedite the recovery of the liquids-rich natural gas reserves.
As further technical understanding is gained on this complex reservoir, the Company plans to redirect capital previously allocated to Kaybob South towards continued drilling on the Viking light oil resource play.
Production
The oil weighting of the Company has continued to grow from 60 percent in January to its current 68 percent. This increase is significant given the higher gas weighting of the Company resulting from the Orion acquisition. Overall production for the third quarter of 2011 is estimated to be 8,550 boepd prior to an adjustment for an over-accrual on second quarter Orion volumes. When the over-accrual is accounted for, the reported volumes are estimated to be 8,450 boepd.
WestFire expects to release unaudited financial and operating results on November 10 at which time production guidance will be updated.
Cautionary Statements
Forward-looking information and statements