Reece drilled three (3 net) gas wells on its property at Greenan. Third party engineering field estimates show the extended absolute open flow test rate, for the first well tested, to be around 50e3m3/d (295 BOE/d). "This was the well we were holding out as having the most risk and we're pleasantly surprised with the results," says Lorne Swalm President and C.E.O. of Reece. Actual production for this well may vary from test rates due to compression facility constraints. With the success of this well and the expected success of the rest of the drilling program, Reece has the ability to meet or exceed its year-end production target of 1,300 BOE/d. The other two Greenan wells will be evaluated over the coming weeks.
The remaining ten (5 net) wells were all cased and are being completed, evaluated and tied in. Information concerning the remaining wells will be released as results become available. Reece intends to have production from all wells on stream by the end of November.
In addition Reece has commenced the oil-drilling portion of its fourth quarter capital program. At Chandler Reece's operating partner has completed the first of two horizontal development wells in the Midale formation, and has moved to the second well. Reece holds a 7.5% gross over-riding royalty convertible to a 25% working interest after payout. The successful drilling of the current well will bring the number of producing wells to nine (2.75 net) at Chandler. Further to the drilling at Chandler Reece plans to drill or otherwise participate in four (2.16 net) additional light oil wells in other areas prior to the end of the fourth quarter.
Mr. Swalm adds, "The lion's share of our 2008 capital budget will be spent on developing our multiple light oil drilling opportunities in West Central and South Eastern Saskatchewan."
Reece is a publicly held oil and gas company headquartered in Medicine Hat, Alberta, Canada that trades on the TSX Venture Exchange under the symbol "RXR".
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
BOEs derived by converting gas to oil at a ratio of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl). BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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