Ryland announced that its joint venture partner, TriAxon Resources Ltd., has drilled, completed and tested its third farm-in well on Ryland Bakken lands in the Flat Lake area of southeast Saskatchewan. The most recent horizontal well, located at 1-22-1-14W2, was multi-stage fracture stimulated. During clean-up of load fluid after the frac, the well flow tested light oil rates in excess of 200 barrels of oil per day, with water cut steadily reducing to approximately 35% as load fluid was recovered. After the flow test, the well was shut in for a pressure buildup and was returned to flowing production last week. TriAxon paid 100% of the costs of drilling completing and equipping the well with Ryland retaining a 50% working interest.
Ryland management is very encouraged by the test results on the new well to date and the development potential of its substantial acreage position in the area. The new well is located approximately 7 miles northeast of the initial producing well drilled by TriAxon on a contiguous lease block owned by Ryland. Ryland, through its wholly owned subsidiary Pebble Petroleum Inc., is a party to three farm-out agreements with TriAxon under which TriAxon was granted the right to farm in to a total of 81 1/4 sections of Pebble's properties in the Flat Lake area. TriAxon's earn-in rights are restricted to the Bakken Formation only. TriAxon is an established and successful operator in the Bakken Formation in southeast Saskatchewan with a focus on developing low permeability reservoirs with horizontal, multi-stage fracture stimulated wells.
Ryland also announces that, with its financial advisor and agent GMP Securities LP, it is continuing to pursue and review various corporate strategies, which may include a sale or merger of the Company, an asset sale, or a teaming agreement with one or more industry partners.
Ryland has agreed to pay GMP a success fee on the closing of any transaction, calculated as a percentage of the transaction's value.
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