Unbridled Energy Corporation has provided an update on its New York properties in Chautauqua County.
As previously disclosed, the Company and its joint venture partners drilled six tight gas sand Medina wells in Q2 of 2008 and utilized a new stimulation treatment. All wells are now producing inline and exhibited initial wellhead rates ranging from 70 to 130 thousand cubic feet per day (mcf/d). These rates are higher than observed from older wells that used outdated stimulation techniques.
As part of a larger ongoing drilling program (greater than 60 locations identified to date), the Company, as operator, is currently in the process of permitting nine additional natural gas wells. A rig has now been secured to commence drilling in Q4 of 2008. The Company is also in late stage negotiations with a utility company to drill a deep well to collect core and logs. The utility will pay for this effort and provide the Company the opportunity to investigate potentially deep gas bearing formations under its acreage. More details will be announced as they become available.
The Company has also concluded a four well recompletion program in the Medina formation. The recompletions cost approximately 65% less than a new well. All four wells are producing inline and are still cleaning up stimulation fluids. This property holds many more recompletion candidates, of which the Company is currently high grading. The next two wells now being selected will complete undeveloped zones that are currently categorized as behind pipe reserves.
One of these completions will be conducted in a new shale formation which was recently cored and logged by the Company in a previous well. Completing this shale zone is scheduled for November 2008, subject to Department of Environment Conservation approval. If successful, many of the Company's existing 61 older wells can be recompleted in these shales, plus a horizontal drilling program will be initiated. Incremental to the Company's existing 3P reserves in the Medina formation, the reserves which may ultimately be achieved from the shale, ranges from 35 to 70 bscf net to the Company's interests, using industry standard recovery factors of 10% to 20% of the gas in place.
The Company now holds and operates over 15,000 acres in Chautauqua County and holds a 50% working interest. In addition, upon completion of a work schedule, the Company will acquire another 980 gross acres held by production.
Joe Frantz, President & CEO, said, "As a result of extreme turmoil in the financial markets, Unbridled Energy's enterprise value has been drastically reduced to a point that management believes grossly understates the Company's value.
The Company's cash, remaining loan opportunity, and current accounts receivable total over $5 million. With these funds, the Company will continue to develop its lower risk, 3P Reserves(i) of 32 bcf net (24 bscf in the Possible category) at the Chautauqua Lake properties. Unbridled will also test a new, unconventional oil play as well as higher impact shale gas opportunities in which the Company operates in the Appalachian Basin and in Canada.
"We would like to take this opportunity to thank our Shareholders for their continued patience during these turbulent times providing management with support to implement its vision and achieve substantial shareholder value over the medium to long term.
"To offer Shareholders more in depth communication with management, including field plans and financial condition, a webcast is being scheduled for the latter part of October 2008. Details will be forthcoming."
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