ProspEx has provided an operational update with respect to recent drilling activity at its East Kakwa project in the Deep Basin.
"The initial flow test results from ProspEx's most recent horizontal well substantially exceed results from our successful first horizontal well announced in September, 2009. These results provide further evidence of the ability of horizontal, multi-frac drilling technology to dramatically improve production at East Kakwa, and of our successful strategic transition to repeatable projects utilizing this technology", said John Rossall, President and Chief Executive Officer.
At East Kakwa, ProspEx's second horizontal well at 15-19-64-4W6 (the "15-19 well") has been successfully drilled and completed. Following completion, the well produced up 4 1/2" casing on clean up test for 38 hours with a final rate of 24.4 million cubic feet ("mmcf") per day at a flowing wellhead pressure of 1,570 pounds per square inch ("psi"). A 21 hour extended flow test was then performed, with the well flowing up 2 3/8" tubing at a rate of 16.0 mmcf per day and a flowing pressure of approximately 1,690 psi.
In comparison, ProspEx's first horizontal well at 2-33-63-4W6M (the "2-33 well") produced on clean up test at a rate of 10.9 mmcf per day at a flowing wellhead pressure of 2,380 psi, and at 6.6 mmcf per day on extended test (at a flowing pressure of approximately 2,300 psi). The 2-33 well has been on production since early November 2009, at a facility restricted average rate of approximately 7.8 mmcf per day (approximately 820 barrels of oil equivalent net to ProspEx under its 60% working interest, including associated liquids production) over the first two months of production.
The estimated cost to drill and complete the 15-19 well is $4.0 million, prior to the deduction of the $0.8 million Alberta Drilling Royalty Credit. The 15-19 well is expected to be tied into ProspEx's pipeline system and placed on production in February, 2010. ProspEx is the operator and has a 60% working interest in the 15-19 well.
A third horizontal well (50% ProspEx working interest) on the East Kakwa trend is currently being drilled by ProspEx. Drilling operations should be finished by late January, with completion and testing operations to follow.
The 15-19 and 2-33 wells were located approximately eight kilometers apart. The third horizontal well will extend the trend an additional five kilometers to the north, for a total of approximately 13 kilometers of trend evaluated with horizontal wells. The Company has identified an inventory of 17 gross (8.5 net) drilling locations on this 13 kilometer trend (assuming a drilling density of two wells per section), in addition to the three wells mentioned above.
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