Border Announces Drilling of First Long-Leg Horizontal Well at Red Earth and Filing of Quarterly Financials
November 29 2012 - 2:45PM
Marketwired Canada
Border Petroleum Corp. (TSX VENTURE:BOR) ("Border" or the "Corporation") is
pleased to announce the successful drilling of its first long-leg Slave Point
horizontal well located at 10-15-85-10W5M (the "10-15 Well") on the Loon River
Cree Nation under federal permit (the "Loon Block") in the Red Earth area of
northern Alberta and the commencement of completion operations.
The 10-15 Well was drilled to a total depth of 3,250 meters, including a 1,630
meter horizontal leg. The logs indicate 952 meters of horizontal wellbore with
3%-9% porosity and 454 meters with over 9% porosity including 256 meters that
exhibited significant dolomitization with 20-33% porosity. Further, the logs
indicated the presence of hydrocarbons in the Slave Point formation confirming
what was seen in rock samples and recorded by the gas detector during drilling.
The horizontal leg of the well was extended by approximately 250 meters to test
the extent of the higher porosity formation encountered at the toe of the well;
drilling operations were ultimately completed when all the drill pipe had been
utilized.
Given its porosity characteristics, Border will complete the well in three
stages. First, Border is scheduled to commence multi-stage fracturing
approximately 850 meters of horizontal wellbore at the toe of the well within
the next 7 days. Border will then complete the middle section of the well
without fracture stimulation where the porosity indicated on logs is up to 33
percent. Finally, Border will complete the heel of the well again utilizing
multi-stage fracture stimulation. It is anticipated that the well will be
completed within the next 3 weeks and equipped and on production test before
year-end. The Corporation has secured approximately 17 square kilometers of 3D
seismic coverage over the area around the 10-15 Well and is preparing to license
a follow-up horizontal location offsetting the 10-15 Well to target this high
porosity zone of the Slave Point. The 10-15 Well was drilled and cased for a
total estimated cost of $2.3 million which exceeded the pre-drill estimate of
$1.7 million due to the extended horizontal section and down-hole tool issues
experienced while drilling the well.
Kelly Kimbley, President and Chief Executive Officer of Border, commented "The
Corporation is encouraged by the higher than expected non-reefal porosity
encountered by the 10-15 Well. We look forward to updating shareholders with
production results as they become available."
Border also announces an update on its two short-leg Slave Point horizontal
wells drilled at Red Earth earlier this year. Longer-term testing conducted on
the two wells indicated that production was being impeded due to wax buildup
common to Slave Point wells in the Red Earth area. Consequently, Border
completed a wax clean-out on one of the wells utilizing de-waxing solvent. The
well was put back on production earlier this month and, based on field reports
to November 28, 2012 covering the first 12 days back on production, the well
produced at an average rate of approximately 48 bopd with virtually all load
fluid now recovered. Based on the initial results of the program, a similar
clean-out operation will be conducted on the Corporation's other short
horizontal well.
Border also conducted workovers and pump changes at its minor properties in the
second quarter and continued to shut-in currently uneconomic natural gas
production of approximately 100 boepd. This has resulted, based on field
reports, in Border currently producing approximately 200 boepd, 50 percent of
which is light oil production.
FILING OF FINANCIALS
Border today announced financial results for its second quarter ended September
30, 2012. The unaudited condensed consolidated interim financial statements and
management's discussion & analysis ("MD&A") have been filed on SEDAR and can be
viewed at www.sedar.com.
HIGHLIGHTS
The following are the highlights of Border's operations for the quarter ended
September 30, 2012:
-- On September 28, 2012, Border completed a short form prospectus offering
with a syndicate of underwriters led by Dundee Securities Ltd. and
including Macquarie Capital Markets Canada Ltd., Canaccord Genuity
Corp., National Bank Financial Inc. and Fraser Mackenzie Limited
(collectively, the "Underwriters"). The Offering consisted of the
issuance of 48,335,000 Common Shares at a price of $0.15 per Common
Share, 4,550,000 CDE Flow-Through Shares at a price of $0.165 per CDE
Flow-Through Share and 55,556,000 CEE Flow-Through Shares at a price of
$0.18 per CEE Flow-Through Share for aggregate gross proceeds of
$18,001,080. The net proceeds of the Offering were to be primarily used
for the Corporation's exploration and development program and for
general corporate purposes.
-- As a subsequent event, in November 2012 Border completed drilling its
first long-leg Slave Point horizontal well and commenced completion
operations.
-- Secured 17 square kilometers of 3D seismic on the Loon Block focused in
the immediate area of the 10-15 Well.
FINANCIAL OVERVIEW
Certain selected financial and operational information for the quarter ended
September 30, 2012 is set out below and should be read in conjunction with the
Corporation's unaudited consolidated financial statements and related MD&A. The
following table provides a summary of key financial results for the three months
ended September 30, 2012 and 2011:
THREE MONTHS ENDED
SEPTEMBER 30
2012 2011
----------------------------------
Financial
Petroleum and natural gas revenues $ 615,410 $ 873,376
Funds flow from operations $ (490,660) $ (409,646)
per share - basic and diluted $ (0.00) $ (0.00)
Net loss $ (1,095,480) $ (772,233)
per share - basic and diluted $ (0.00) $ (0.01)
Capital expenditures $ 349,918 $ 15,906,347
Weighted average shares outstanding
basic and diluted 226,895,366 102,305,944
Operational
Production
Oil and liquids (bbls/d) 76 85
Natural gas (mcf/d) 616 905
Oil equivalent (boe/d) 179 236
Sales price per unit
Oil and liquids ($/bbl) 69.29 71.65
Natural gas ($/mcf) 2.33 4.14
Oil equivalent ($/boe) 37.47 40.23
Reserves (Proved plus probable)
Oil and liquids (mbbls) 1,803 3,782
Natural gas (mmcf) 2,391 4,737
Oil equivalent (mboe) 2,202 4,571
OUTLOOK
Border has entered into the second phase of development of the Slave Point play
on the 18,720 acre Loon Block. The Corporation's first phase was to drill short,
lower risk horizontal wells in the highest structural part of the Loon Block
utilizing vertical well control and two-dimensional seismic. These wells were
drilled and completed in the spring of 2012. This second phase involves stepping
out and drilling to the west and south of the initial short-leg wells where the
Slave Point formation is thicker utilizing long-leg wells (greater than 1000
meters) to further delineate the Loon Block. Drilling locations were selected
utilizing vertical well control and two-dimensional seismic. Border planned to
drill two long-leg wells and then acquire three-dimensional seismic data to
identify the next prospective area of development. However, given the positive
initial results presented by the first long-leg well, management has decided to
delay drilling of the next well until it has completed an extended production
test from the 10-15 Well and reviewed the recently acquired 3D seismic data over
the area in proximity to the 10-15 Well with a view to licensing an offset well
as soon as possible. Future drilling will balance continued step out drilling
with development within the high porosity rock in proximity to the 10-15 Well.
Border will provide additional information regarding the 10-15 Well and
offsetting drilling as it becomes available.
Border is well funded to complete its ongoing capital program with a current
positive working capital balance of approximately $16 million and an unutilized
bank line of $3.5 million.
Forward-Looking Statements
The forward-looking statements contained in this document are based on certain
key expectations and assumptions made by Border. Although Border believes that
the expectations and assumptions on which the forward-looking statements are
based are reasonable, undue reliance should not be placed on the forward-looking
statements because Border can give no assurance that they will prove to be
correct.
Since forward-looking statements address future events and conditions, by their
very nature they involve inherent risks and uncertainties. Actual results could
differ materially from those currently anticipated due to a number of factors
and risks. These include, but are not limited to, the failure to obtain
necessary regulatory approvals, risks associated with the oil and gas industry
in general (e.g., operational risks in development, exploration and production;
delays or changes in plans with respect to exploration or development projects
or capital expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to production, costs and expenses, and
health, safety and environmental risks), commodity price and exchange rate
fluctuations and uncertainties resulting from potential delays or changes in
plans with respect to exploration or development projects or capital
expenditures. A description of assumptions used to develop such forward-looking
information and a description of risk factors that may cause actual results to
differ materially from forward-looking information can be found in Border's
disclosure documents on the SEDAR website at www.sedar.com.
The forward-looking statements contained in this document are made as of the
date hereof and Border undertakes no obligation to update publicly or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, unless so required by applicable
securities laws.
BOE
BOEs may be misleading, particularly if used in isolation. A BOE conversion
ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method
primarily applicable at the burner tip and does not represent a value
equivalency at the wellhead.
FOR FURTHER INFORMATION PLEASE CONTACT:
Border Petroleum Corp.
Kelly Kimbley
President & CEO
(403) 538-8450
(403) 444-5042 (FAX)
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