Post by
ShawnyCash1 on Aug 16, 2011 7:21pm
NEWS UPDATE
Calgary, Alberta CANADA, August 16, 2011 /FSC/ - Western Plains Petroleum Ltd. (WPP - TSX Venture)
("Western Plains" or the "Company") is pleased to provide an update regarding its recent drilling and operating activities in its core heavy oil operating area surrounding Lloydminster in Alberta and Saskatchewan. The Company has shifted its strategic focus to drilling new wells. The prior focus was one of acquiring and reactivating shut-in wells. This shift proved successful in 2010 with six (2.75 net) wells drilled in the second half of the year. The Company has continued with this strategic focus in 2011 and to date has participated in the drilling of 7 successful oil wells (4.33 net), with 6 of those wells drilled since May 1, 2011, as summarized below:
Saskatchewan
* The Company participated with a farmee partner in the drilling and surface completion of a test well to earn a 100% interest (50% undivided interest each), subject to a sliding scale (10% minimum - 15% maximum) non-convertible overriding royalty to the farmor, on petroleum and natural gas interests located on the W/2 of Section 36-44-23 W3M and two (2) legal subdivisions in the E/2 of Section 36-44-23W3M in the Carruthers area of Saskatchewan, south-east of Lloydminster. The test well is expected to be brought on production in the next 10 days subject to service rig availability.
* The Company drilled one (0.5 net) well in the Landrose, Saskatchewan area, east of Lloydminster. The new well, located on Section 6-50-25 W3M, is expected to be brought on production this week. This is the 7th successful well that the Company has drilled in the Landrose area, which now provides the Company with over 50% of its heavy oil production.
* The Company drilled and completed a well in the Edam area of Saskatchewan, approximately 80 kilometres east of Lloydminster, to earn an undivided 50% interest in 40 acres of petroleum and natural gas rights located on Section 36 - 48 - 21 W3M. The well is currently producing heavy oil at a rate of approximately 40 bbls/d (20 bbls/d net to the Company).
* Production from the Company's recently drilled and completed a farm-in well located on Section 28-49-22 W3M in the Standard Hill area south of Lloydminster in Saskatchewan, has stabilized at an average rate of approximately 60 bbls/d net to Western Plains subject to gross overriding royalty of 6% to the farmor. As announced previously, Western Plains earned a 100% interest in the well which was drilled under the terms of a farmout agreement covering two 40 acre parcels located on each of Section 28-49-22 W3M and Section 10-47-26 W3M.
* The Company has applied for applicable approvals and licensing, and subject to receipt of the same, intends to drill, complete and equip a test well no later than September 30, 2011, on a 40 acre parcel located in the Lashburn area of Saskatchewan, approximately 35 kilometres south-east of Lloydminster. Operations will be carried out jointly pursuant to a previously announced farm-in agreement. Under the terms of the farm-in agreement, Western Plains and its farmee partner pay 100% of the drilling, completion and equipping costs to earn a 100% interest in the property (a 50% undivided interest each), subject to a sliding scale (10% minimum - 15% maximum) non-convertible, overriding royalty on production to the farmor.
Alberta
* The Company farmed out 50% of its 100% interest in a new drill on 40 acres of petroleum and natural gas rights located on Section 18 - 50 - 2 W4M, west of Lloydminster in the Kitscoty area of Alberta. The test well encountered 5 metres of Sparky formation and is expected to be completed and brought on production by the end of this week. Under the terms of the farm-out agreement, Western Plains received the cash payment of $32,201 and the farmee was responsible for 50% of the drilling and completion costs of the test well.
* The Company participated in the drilling of two wells (1.33 net to the Company) on the Blackfoot heavy oil property in the Lloydminster Alberta area. The first well, located on Section 11 - 50 - 2 W4M, has produced at an average rate of 18 bbls/d (6 bbls/d net to the Company). The second well, located on Section 14 - 50 - 2 W4M, is expected to produce heavy oil at rates comparable to surrounding wells.
Once all 7 of the 2011 wells are brought on production, the Company's total production capacity is expected to approximate 300 bbls/d.