CALGARY, ALBERTA--(Marketwire - July 23, 2012) - Chinook Energy Inc. ("Chinook") (TSX:CKE) is pleased to provide the following operational update on its Bir Ben Tartar ("BBT") concession.
The first horizontal well to be drilled targeting the Ordovician Bir Ben Tartar Formation in the Ghadames Basin of Southern Tunisia was completed on July 1, 2012 with the rig release of the TT16 well. Foradex Rig 14 completed the 42 day operation with no incident or accidents. Final measured depth of the well was 2,435 metres with a horizontal section of 950 metres. Gross drilling costs for the well approximated USD$7.0 million (net USD$6.02 million).
A Packer's Plus system was successfully run on the TT16 well in preparation for a multi-stage fracture stimulation of the Ordovician Jeffara and Bir Ben Tartar formations. Completion operations commenced on July 8, 2012 and fracturing operations were completed on July 15, 2012 after successfully placing a total of 385,285 lbs of sand over eight fracture intervals spaced along the 950 metre horizontal section. Chinook has successfully drilled out the frac ports, ensuring the well is open along the entire length of the horizontal section, and Chinook expects to commence flowing the well back within 48 hours.
The TT16 well is the first multi-stage, hydraulically fractured horizontal well in Tunisia. It is also the largest multi-stage job attempted by Schlumberger on the African continent. Despite the significant challenges associated with logistics, equipment, and manpower, the operation was completed successfully and represents a valid test of this recognized technology in a new application. The target reservoir on the BBT concession is a thick (up to 50 metres of pay column), low permeability (average close to one millidarcy permeability), heterogeneous clastic reservoir that demonstrates commercial flow rates from stimulated vertical wells. The application of horizontal wells in this low quality, conventional reservoir is an attempt to increase the rate per well and ultimate recovery relative to what can be achieved with fractured vertical wells.
On July 7, 2012, the Foradex Rig 14 spud Chinook's second horizontal well on the concession at the TT13 location. This well is approaching the intermediate casing point at the top of the Lower Jeffara formation from where Chinook plans to drill an 800 to 1,000 metre horizontal section with a final measured total depth of approximately 2,600 metres.
Matt Brister, Chief Executive Officer of Chinook, commented "We want to recognize the exemplary efforts of our operations staff, supervisory personnel and key service providers in successfully executing the drilling and completion operation of this critically important operation. The skill, effort and innovation demonstrated in achieving a number of "firsts" in Tunisia bodes well for the future application of multi-stage horizontal applications on our BBT oil project as we apply the key lessons learned to future wells."
Chinook expects to provide a further update on the completion operations at the TT16 well once a representative flow rate is established, which we expect could take seven to ten days, and on the drilling and completion operations at the TT13 well in due course.
About Chinook Energy Inc.
Chinook is a Calgary-based public oil and gas exploration and development company that combines multi-zone conventional production with resource plays in Western Canada with an exciting high growth oil business onshore and offshore Tunisia in North Africa.
In the interest of providing shareholders and potential investors with information regarding Chinook, including management's assessment of the future plans and operations of Chinook, certain statements contained in this news release constitute forward-looking statements or information (collectively "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "could", "plan", "intend", "should", "believe", "outlook", "potential", "target" and similar words suggesting future events or future performance. In particular, this news release contains, without limitation, forward-looking statements pertaining to future operations to be completed and the timing thereof at the TT16 and TT13 locations.
With respect to the forward-looking statements contained in this news release, Chinook has made assumptions regarding, among other things: the ability of Chinook to continue to operate in Tunisia with limited logistical security and operational issues, future capital expenditure levels, future oil and natural gas prices, future oil and natural gas production levels, Chinook's ability to obtain equipment in a timely manner to carry out exploration and development activities, the impact of increasing competition, the ability of Chinook to add production and reserves through development and exploitation activities, certain commodity price and other cost assumptions, the continued availability of adequate debt and equity financing and cash flow to fund its planned expenditures. Although Chinook believes that the expectations reflected in the forward-looking statements contained in this news release, and the assumptions on which such forward-looking statements are made, are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned not to place undue reliance on forward-looking statements included in this news release, as there can be no assurance that the plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties that contribute to the possibility that predictions, forecasts, projections and other forward-looking statements will not occur, which may cause Chinook's actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements.
These risks and uncertainties include, without limitation, political and security risks associated with Chinook's Tunisian operations, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve and resource estimates, the continued impact of shut-in production, environmental risks, competition from other producers, inability to retain drilling rigs and other services, capital expenditure costs, including drilling, completion and facilities costs, unexpected decline rates in wells, delays in projects and/or operations resulting from surface conditions, wells not performing as expected, delays resulting from or inability to obtain the required regulatory approvals and ability to access sufficient capital from internal and external sources. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Readers are cautioned that the forgoing list of factors is not exhaustive. Additional information on these and other factors that could affect Chinook'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) and at Chinook's website (www.chinookenergyinc.com). Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Chinook does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.