DeeThree Drills Two New Discoveries at Lethbridge Property

DeeThree Exploration has recently completed the drilling of two new wells on its Lethbridge property, resulting in two new discoveries. This success is a continuation of the results previously announced in the operational update provided on August 31, 2009.

As announced on August 31, 2009, DeeThree discovered a new pool of natural gas at the southernmost end of its Lethbridge property during the drilling program completed in the second quarter of 2009. This high deliverability well (100% working interest) tested at rates of approximately 3,500 mcf/d during a two day flow test and is presently shut-in pending tie-in. This discovery is the primary reason for an 18 km pipeline extension project that is underway. In addition to this pipeline, DeeThree is continuing with preparatory work on five additional drilling prospects and various tie-in projects throughout the Lethbridge property.

The first well completed in the third quarter of 2009 (100% working interest) successfully encountered its primary objective, being an extension of a prolific natural gas pool that is currently owned 100% by DeeThree. Preliminary completion reports indicate that reservoir pressure is higher than expected which, combined with the initial test volumes of approximately 2,600 mcf/d over a 27 hour flow test, results in the potential for substantial reserves remaining. In addition to the primary objective, a new uphole zone was discovered which drillstem tested at flow rates exceeding 650 mcf/day. Two drilling locations to follow-up this discovery have already been identified on 3D seismic.

The second well completed in the third quarter of 2009 (100% working interest) was an exploratory well targeting deeper horizons. Based on shows during drilling, log analysis, and preliminary completion data, the well appears to have successfully encountered a new oil pool. This well is particularly important to DeeThree's ongoing exploration activities by proving an extension to an existing oil producing trend, situated where the current 3D seismic program is underway.

All of the above seismically-driven discoveries are part of a larger ongoing expansion project being undertaken on DeeThree's Lethbridge property.

Highlights of the results to date from DeeThree's 2009 drilling program are provided below.

  • A substantial increase in the tested behind pipe gas production capability for the Lethbridge property, which is now estimated to exceed 500 boe/d representing a significant increase over current daily volumes. This will be put into production in a prudent manner dependent primarily upon natural gas pricing.
  • A significant increase in proved natural gas reserves.
  • Validation of the DeeThree's geophysical and geological interpretations, leading to the identification of additional drilling locations.
  • Increased potential for commodity diversification.

These results have considerably enhanced the dynamics of DeeThree's Lethbridge property and consequently the Company will likely expedite exploration and development activities planned for the area.

Fieldwork has commenced on the 36 section 3D seismic program announced in DeeThree's August 31, 2009 news release. This program will provide data that is contiguous with the existing seismic data that covers two of the discoveries described in this news release and is anticipated to provide additional information that will assist with exploration in the oil fairway within the property.

Three more wells are slated to be drilled during the remainder of this year. The number of wells to be drilled may be increased should natural gas prices continue to improve.

Martin Cheyne, DeeThree's President and Chief Executive Officer, commented, "The results to date have far exceeded our initial expectations. We are very excited about the further validation of our G&G models, and our current seismic program will allow us to further exploit the potential of an important block of our significant undeveloped acreage."