CALGARY, ALBERTA--(Marketwire - March 11, 2013) - Artisan Energy Corporation ("Artisan" or the "Corporation") (TSX VENTURE:AEC) is pleased to provide the following operations and corporate update.
- 100% drilling success on first three wells.
- Expanded key lands with 1,280 acre purchase at March 6, 2013 Tomahawk Area, Alberta Crown land sale.
- Drilling has de-risked and proved development oil projects at Ferrybank and Chip Lake with more than 20 future horizontal drilling locations between the two properties.
- Increased production from approximately 30 boe/d to 105 boe/d (approximately 86% light oil), with another 230 boe/d pending solution gas pipeline tie-in.
- Commencing drilling of two additional horizontal oil wells at Ferrybank.
Artisan now has a 100% working interest in 22,960 net acres in two core areas in Central and SE Alberta, with an inventory of 70 development-focused drilling locations. Artisan also has varied working interests in an additional 25,316 gross acres (15,691 net acres) of prospective properties in Alberta. Artisan's current on-stream oil and gas production is approximately 105 boe/d, consisting of approximately 86% light oil. Artisan has an additional 88 bbl/d and 850 MMcf/d, for a combined 230 boe/d of production awaiting tie-in.
Artisan's key properties include three development oil projects at Chip Lake and Ferrybank in Central Alberta and Conrad in SE Alberta, as well as a liquids rich gas project with prospective oil opportunities at Tomahawk / Bigoray in Central Alberta.
Artisan has successfully completed and production tested its initial horizontal rock creek oil well at Chip Lake. However, due to regulatory requirements to conserve natural gas at this location, Artisan was required to flow the well at restricted rates and capture and truck natural gas to obtain sufficient production test data. Artisan flowed the 9-33-53-10W5 horizontal Chip Lake well for two weeks of continuous testing which concluded with an extended and stable rate of 50 bbl/d of clean oil plus 750 MMcf/d of associated natural gas at a surface flowing pressure of 350 psig. Based on this less than 50% drawdown test rate, Artisan expects to start the well on a pumping basis at sales of 88 bbls/d (including NGL's) and 850 MMcf/d (230 boe/d) or more. We expect this rate to be restricted initially because of short term limited capacity for the raw solution gas of 1,000 MMcf/day. Although initial productive test rates may not be indicative of long-term performance and ultimate reserve recovery, Artisan is comfortable that it has obtained sufficient data to determine that the initial Chip Lake well will produce oil and gas commercially at or in excess of the suggested rates.
The well is currently shut-in awaiting regulatory approval and construction of a 3km tie-in pipeline. Artisan expects to complete acquisition of the right of way by mid to late March and construction of the pipeline in May. Once the pipeline is constructed Artisan will be in a position to drill an additional horizontal well from its existing pad and five additional horizontal wells from a nearby approved multi-well pad. Future wells will target areas of the pool that are expected to produce at lower gas/oil ratios. Artisan expects to drill up to six rock creek oil wells and construct a multi-well oil battery at Chip Lake in 2013.
In January, Artisan repaired a mechanical problem at its initial horizontal Ferrybank Belly River oil well by drilling out the balls that were stuck in seats after the fracture stimulation process. Since that time the well has produced at an average rate of 85 bbl/d exceeding Artisan's 60 day average rate expectation of 75 bbl/d.
In the next few weeks Artisan will be commencing the drilling of two back to back Ferrybank horizontal Belly River oil wells, which will be longer than the initial 9-8-43-27W4 horizontal well, with planned horizontal lengths of up to 1375m compared to the 750m length of the initial Ferrybank well. Upon completion and testing of these two wells, Artisan plans to proceed with construction of its own multi-well oil treating facility at its 12-8-43-27W4 location.
Artisan recently added 1920 gross (1600 net) acres of land to its 10,240 acres of 100% owned land at Tomahawk (Bigoray) in Central Alberta. At the March 6, 2013 Alberta crown land sale the company added 1,280 acres of contiguous 100% owned acreage. In January, Artisan drilled the 1-20-52-7W5M vertical test well, which continued 5,760 acres of its 100% owned acreage and also earned a 50% working interest in an additional 640 acres owned by a third party industry operator.
This vertical test well produced 80 barrels of clean oil and 700 MMcf of gas during a 48 hour flow test of one prospective zone. Pressure data from the test indicated that the well is in an area of limited reservoir within the zone. However, the clean oil test does have very positive implication for the balance of Artisan's lands, where historical wells indicate the development of better reservoir with improved porosity and areal extent. Successful horizontal development of this conventional reservoir is an emerging play that is currently being pursued by several other operators along this trend.
Despite the encouraging oil test results from the test well at Tomahawk (Bigoray), Artisan's primary target in the Tomahawk area is horizontal development of high liquids natural gas in the Wilrich Sand formation. Artisan encountered a 16m thick Wilrich Sand in this test well. With a view to booking reserves in the Wilrich and continuing a large portion of our lands indefinitely on the basis of proven productivity, Artisan plans to complete and test the Wilrich Sand zone in the coming months.
Extension of the debt facility
Artisan received a restated commitment letter dated February 28, 2013 from its current lender. The letter extends the current $2.0 million operating loan and expands the non-revolving facility from $5.0 million to $6.0 million. Artisan has until March 14, 2013 to accept the terms of the revised facility.
Change of Year-end
Artisan has changed its financial year end from February 28th to December 31st. The change will align the Corporation's financial reporting with the calendar year and with other oil and gas companies in its peer group. Further details can be found in Artisan's Notice of Change in Year End prepared in accordance with Section 4.8 of National Instrument 51-102 - Continuous Disclosure Obligations, which has been filed on SEDAR under Artisan's profile.
Artisan is pleased to announce that its corporate website is now live and can be found at www.artisanenergy.ca.
Reported production represents Artisan's ownership share of sales before the deduction of royalties. Where amounts are expressed on a barrel of oil equivalent ("boe") basis, natural gas has been converted at a ratio of six thousand cubic feet to one boe. This ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Boe's may be misleading, particularly if used in isolation. References to natural gas liquids ("liquids") include condensate, propane, butane and ethane and one barrel of liquids is considered to be equivalent to one boe.
This news release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable securities laws relating to estimates of additional oil and gas production, anticipated timing and results from operational activities, the timing and occurrence of capital expenditure and plans for further development. Readers are cautioned to not place undue reliance on forward-looking statements. While Artisan believes the expectations reflected in the forward-looking statements are reasonable, actual results and developments may differ materially from those contemplated by these statements depending on, among other things, issues encountered in drilling, completion and tie-in operations, the amount and timing of capital expenditures and factors beyond Artisan's control. The forward-looking information contained in this news release is made as at the date of this news release and Artisan does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Readers are urged to consider these factors carefully in evaluating any forward-looking information.
Additional information on other factors that could affect Artisan's operations and financial results are included in reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.