Cequence Completes 1st Wilrich HZ Well



Cequence provided an operational update with respect to its Wilrich natural gas and Cardium oil resource plays.

Cequence has successfully completed its first Wilrich horizontal well at Simonette (the "Discovery Well"). The well was drilled in August to a total measured depth of 4,416 meters with a horizontal section of 1,637 meters. After 20 days of delay due to weather, the well was completed with a multi-stage water based fracture stimulation over 16 intervals. The well flowed for 72 hours to clean up fracture fluids. Following clean up, the well has been flowing to producing facilities for 100 hours at a facility restricted rate of 8.5 mmcf/d and a wellhead flowing pressure of 1,075 psi. The Discovery well cost $4.8 million to drill and complete and generated approximately $4 million in Deep Gas Royalty Credits and Alberta Drilling Incentives. An equivalent amount of Cequence natural gas has been shut-in at Simonette to accommodate the volumes from the Discovery well that are flowing into the Simonette plant. The Simonette gas plant has available processing capacity and operations are underway to install field compression to de-bottleneck the gas gathering system.

Cequence has approximately 120 net sections of land at Simonette including 15 net sections (100% WI) of land directly offsetting the Discovery Well with similar Wilrich potential. With this initial drilling success, management believes that there is the potential for between 30 and 45 additional Wilrich horizontal drilling locations in this area depending on the ultimate spacing required to maximize the resource. The Company believed that with expected drilling and completion costs, the anticipated natural gas production and liquids yield of approximately 25 barrels per million cubic feet, the Wilrich will be one of the leading economic plays in Western Canada. The Simonette area has multi-zone resource potential in a number of other prospective horizons.

Cequence has also successfully drilled its first Cardium oil well at Garrington, Alberta. Completion efforts are currently underway for a multi-stage oil based fracture stimulation over 13 intervals in the 1,250 meter long horizontal portion of the well. Initial results are expected within the next two weeks.

Cequence plans to focus the balance of its 2010 and Q1 2011 capital program on oil and liquids-rich natural gas prospects with the objective of testing those prospects which have the potential to add to our growing inventory of resource-style drilling locations for the future.