(TheNewswire)
June 26, 2024 - Calgary, Alberta – TheNewswire - WesCan Energy Corp. (TSXV: WCE) (“WesCan” or the “Company”) Wescan Energy announces positive developments from Phase 1 of its field optimization activities with May sales of 121 bbls/d. Current field production continues to trend higher with the implementation of the previously announced field optimizations. The 2022 drill 105/13-22-038-03-W4 has now increased production from ~30 bbl/d to 49 bbl/d currently, which is the maximum monthly production on that well thus far. Further production increases from Phase 1 are expected as we accelerate into Phase 2 of field optimization activities into the first week of July. Additionally, Wescan has reduced operating expenses by coordinating field work, reducing workover expenses through proactive field management, significant downhole and surface chemical work, and reduction of electricity expenses which constitutes a major portion of our fixed operating expenses.
Operations Update: The casing gas compressor unit installed at 105/13-22 has exceeded expectations with the well producing ~49 bbls/d in May 2024, a full 53% higher than April 2024 with further downhole cleanouts and solvent injection underway. The new chemical pump installed on the flowline has kept surface equipment clean and pressure differentials to a minimum.
A second casing gas compressor unit is now installed and under optimization, with this unit pulling on 5 wells, including our 2nd most productive well 14-22-38-03W4. Casing pressure will be brought down to 0 psi over a period of time to minimize formation damage, prevent wellbore collapse, and allow for accurate well response testing while keeping the battery free of sudden slugs of wax and scale that may mobilize from the reservoir and well tubing. Well 02-27 was brought back online after extensive downhole work, sand and scale cleanout, and replacement of corroded tubing joints. Further logging and economic analysis is underway on 3 currently suspended wells in preparation for potential workovers and further downhole stimulation including perforating of bypassed pay or reperforating of zone. Certain wells with joints of fluid have been upgraded with bigger pumpjacks to allow for reservoir drawdown and full utilization of downhole pumps.
Pigging work has commenced across the field, including wells which have not been pigged for several years, including the installation of pig senders and receivers on flowlines previously unable to be pigged due to lack of surface equipment. Considerable maintenance has been completed on field equipment, such as hydraulic jacks with seal issues, engines in poor condition, gearbox preventative maintenance, pump jack belts, and surface equipment affected by wax and scale, in order to allow the field and wells to run at higher runtimes throughout the summer and winter climate. The 04-29-28-03W4 battery runtime has also been improved through the installation of a spare air compressor, an overhaul on current water injection pump, the introduction of a spare water injection pump, a complete cleanout of the produced water tank and water injection system, including an upgraded inventory of regular and critical components to allow for timely maintenance activities. The overall impact of these pro-active changes are expected to be realized in the coming months as Wescan expects to see field production positively impacted by the recent maintenance and operational improvements.
Legacy Issues: In June 2024, Wescan was advised that additional unpaid taxes in arrears, that were not previously recorded in Wescan’s financials, are currently outstanding with an upcoming payment deadline. Wescan has engaged the payee and is coming to an agreement on the outstanding tax issue. Management is seeking legal advice on potential legal action towards previous management in regard to this ‘pattern of misleading practices.
As addressed in the previous news release of ongoing discussions on seismic with two entities that bear rights to it, no agreement has yet been reached as Wescan has been seeking a competitive arrangement that has not yet materialized. While Wescan team has been aiming to have its single well drilling program commence this fall, this may potentially delay our drilling program to the following spring 2025 depending on when agreement on seismic will be finalized and how quickly this seismic can be reprocessed along with completion of inversion study. Management is focused on risk mitigation on the new drill, with an emphasis on attaining maximum downhole geology information before proceeding on the drilling program.
Currently, field optimizations continue to be our top priority in conjunction with repaying the $600K bridge loan in an expediated manner. To provide more clarity to the previous New Release of “WesCan announce loan Transaction”, it’s a consolidation of the previous loan agreements from our creditor under one loan agreement and collateralizing that loan against the Wescan asset. From the announced $2.3MM fully amortized loan agreement, $1.2MM was attributable to the initial loan provided by the creditor over previous years, and $500K of interest payment accruals in which no payment was ever made by previous management. In conjunction with the $600K bridge loan from 2023, historic amounts total $2.3MM. On June 27, 2024, a ~$60K monthly payment will begin the repayment process of these historic arrears. Through management’s reduction in operating expenses, G&A, and increased production, the new monthly loan payments will be made without excessively burdening corporate cashflow.
Wescan once again thanks shareholders for your patience throughout this turnaround process and will seek to continue to update shareholders on a timely basis.
All updates and press releases will be available on the Company’s website at www.wescanenergycorp.com. Further information regarding the Company and its future plans will be disseminated in future press releases.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Leo Berezan, Interim President & CEO Ed Leung, Interim CFO
WESCAN ENERGY CORP. WESCAN ENERGY CORP.
Tel: (604) 240-3064 Tel: (604) 861-6900
TSX Venture: WCE www.wescanenergycorp.com
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