1010 - 609 Granville Street
Vancouver, BC V7Y 1G5
Tel: 604-689-0037
evaluation for three of its projects (the "51-101 Report").
The 51-101 Report was prepared by Integrated Petroleum
Technologies, Inc. ("IPT.") The 51-101 report has been filed
with a Material Change Report under the Company's profile on
www.sedar.com on the date of this release.
IPT was retained by Wind River to prepare an evaluation under
Canadian Standards National Instrument
51-101 regarding three of Wind River's projects. The
evaluation provided in the 51-101 Report is based on
interpretation of technical data including geological maps,
wells logs, petro-physical analysis, cross- sections,
engineering materials and other information supplied by Wind
River, and published information.
IPT is a qualified reserves evaluator and has prepared the
51-101 report in accordance with the COGE
Handbook.
An appendix of abbreviations used in the 51-101 Report and in
this release is located below.
Wind River has a 70.3125% interest in 45,742 acres in the "Phat City Prospect." The Phat City Prospect is located in Valley County of northeastern Montana near the town of Glasgow. Wind River drilled the Cornwell 1-14 well in November 2011 within the project. The Nisku and the Three Forks (Bakken) formations were penetrated and are identified in the 51-101 report as prospective resources.
Phat City Nisku
The Cornwell 1-14 well encountered two benches of the Nisku.
The upper bench was oil saturated and the lower bench was
water bearing. A ten foot thick dense dolomite interval
separates the upper and lower Nisku benches. A completion
attempt was unsuccessful due to excessive water production
from the lower bench. Attempts to shut off the water from the
lower bench were unsuccessful. The 51-101 report estimates
potential per-well recoveries based on engineering analysis
of information obtained from the Cornwell1-14 well, data from
other wells in the area, and two nearby analog fields, Tule
Creek and Tule Creek East Fields. The Tule Creek East Field
recovered 10.6 MMstbo (million stock tank barrels) and
2.7
BCF from seven wells which equates to an average recovery of
1.5 MMstbo and 0.4 BCF per well. A
stock tank barrel is one barrel of stabilized gas free oil at
the surface.
The following table summarizes the attributes assigned to the
upper Nusku in the 51-101 report:
The 51-101 Report estimates potential prospective oil and gas
recoverable resource from a single 160 acre spacing unit. The
resource estimate is presented as a total for a single well,
and as Wind River's net share. The net share figure takes
into account both the Company's working interest share and
the impact of royalties. IPT's high estimate of Gross
Recoverable Oil per 160 acre spacing unit is 838,000 stock
tank barrels and the low estimate is 156,000 stock tank
barrels. The 51-101 report states that there is potential for
125 to 170 drillable locations within Wind River's acreage.
This equates to 142 MMBO of potentially recoverable oil for
the high case (838 Mstbo/well x 170 wells) and 19.5 MMBO for
the low case (156 MSTBO/well x 125 wells).
The 51-101 report also projects potential single-well
economics based upon 12/30/11 NYMEX pricing less
$12/BO ( initially, oil at $86.83 per BO, gas at $3.63 per
Mcf). Total drill and complete cost is estimated at
$1.5 million per well. Wind River's cost share of the next
well in the project is 93.7% and Wind River's cost share of
subsequent wells (development wells) wells will be 70.3%. For
a development well, the 51-
101 report projects that an investment by Wind River of $1.05
million would result in a NPV-10 value of
$13.4 million per well and an internal rate of return of 400%
in the high case, and an NPV-10 value of
$1.16 million and internal rate of return of 32% for the low
case. This equates to a potential NPV-10 value net to Wind
River of $ 2,278 million for the high case ($13.4 million per
well x 170 wells) and $145 million for the low case ($1.16
million per well x 125 wells).
A geologic analysis prepared by Mr. Curtis Ditzell of Ditzell
Exploration and Production, LLC dated
December 19, 2011 is attached to the 51-101 report.
The Three Forks (Bakken) formation is also identified in the
51-101 report as a prospective resource. The Cornwell 1-14
well penetrated 70 feet of Three Forks interval. No attempt
was made to complete the Three Forks formation for production
in the Cornwell 1-14 well since management believes
horizontal well completions will be required to effectively
exploit the Three Forks formation. The table below summarizes
the attributes established in the evaluation of the Three
Forks formation in the 51-101 report:
The 51-101 report estimates potential prospective oil and gas
recoverable resource from a single 80 acre spacing unit. The
resource estimate is presented as a total for a single well,
and as Wind River's net share. The net share figure takes
into account both the Company's working interest share and
the impact of royalties. The 51-101 report's high estimate of
Gross Recoverable Oil per 80 acre spacing unit is
347,558 stock tank barrels and the low estimate is 62,560
stock tank barrels. Management believes that the Three Forks
will be best exploited by utilizing horizontal drilling and
completion techniques and that individual well recovery using
these techniques will exceed the 80 acre potential recoveries
reported in the above table.
The Day Butte field is located in Fremont County Wyoming. The
Day Butte Field produces from the Lower Ft. Union Formation
at depths up to 9,704 feet. Wind River owns a 100% working
interest in the Day Butte Federal 1-17 well, which is
currently the only producing well in the field, as well as
1,578 acres in the vicinity. Wind River's acreage is included
within the Moneta Divide project proposed by Encana
Corporation, Noble Energy, and Conoco/Phillips. The Moneta
Divide project is projected to have 4,200 wells drilled to
recover gas from the Ft. Union formation within the next 10
years.
Wind River has applied for drilling permits for two wells
offsetting the Day Butte Federal 1-17 well and expects that
the drilling permits will allow for drilling of the wells in
Q3 2012.
The following tables summarize the developed and undeveloped
reserves assigned to the Day Butte
Field in the 51-101 report:
The report indicates that Wind River's total developed
reserves are 2,646 MMscf with an NPV10 of
$4.986 million. Wind River's net undeveloped reserves are
reported as 98,527 MMscf. Reserves are summarized by category
below:
Category | Gross MMscf | Net MMscf | Gross MBO | Net MBO |
Proved | 229 | 188 | 1.8 | 1.5 |
Probable | 9,716 | 7,967 | 77.7 | 63.7 |
Total Proved & Probable (P1) | 9,945 | 8,155 | 79.5 | 65.2 |
Possible | 107,154 | 93,018 | 857.3 | 744.4 |
Total Reserves | 117,099 | 101,173 | 936.8 | 809.6 |
The 51-101 report analyzed the projected economics of
development wells on Wind River's Day Butte properties.
Reserves assigned to the deeper intervals (comparable to
9,290' to 9,704' in the Federal 1-17 well) were classified as
probable. Reserves assigned to shallower intervals (8,502' to
9,290' in the Fed 1-
17 well) were classified as possible. Gas and oil prices were
based on CIG (Wyoming) strip pricing as of
12-30-2011. The results of the analysis are summarized below:
Category | Probable | Possible | Total |
Gross MMscf | 2,776 | 2,997 | 5,773 |
Net MMscf | 2,276 | 2,458 | 4,734 |
Gross Mstbo | 22.2 | 24 | 46.2 |
Net Mstbo | 18.2 | 19.7 | 37.9 |
Investment M$ | 2,000 | 500 | 2,500 |
Rate-of- return (%) | 40 | 400 | 200 |
Return on Investment | 5.5:1 | 23.6:1 | 8.2:1 |
NPV10 (M$) | 2,922 | 4,684 | 7,606 |
The Emerald Forest Project is located in Uinta County,
Wyoming. Wind River owns 2,240 acres in the project. The
Emerald Forest Project is identified in the 51-101 report as
a prospective resource. The potential gas reservoir is
located at about 5,500 feet deep. Petrographic and
petrophysical analyses of a well which was drilled in 1985
were utilized in the analysis as well as other data. A
summary of reservoir parameters derived from the study is
shown below:
A summary of the prospective resource analysis results is
shown below:
Wind River management believes this project would most likely
be developed on 640 acre spacing. The above analysis would
indicate that the gross gas in place on 640 acres would be
68,528 MMscf.
Undiscovered petroleum Initially-In-Place (equivalent to undiscovered resources) is the quantity of petroleum that is estimated, on a given date, to be contained in accumulations yet to be discovered.
Definition of Prospective Resource as per COGE Handbook:Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity.
Caution Respecting Reserves and Other Oil and Gas Information
The determination of oil and gas reserves or resources
involves the preparation of estimates that have an inherent
degree of associated uncertainty. Categories of proved and
probable reserves and different categories of resources have
been established to reflect the level of these uncertainties
and to provide an indication of the probability of recovery.
The estimation and classification of reserves and resources
requires the application of professional judgment combined
with geological and engineering knowledge to assess whether
or not specific reserves or resources classification criteria
have been satisfied.
Knowledge of concepts including uncertainty and risk,
probability and statistics, and deterministic and
probabilistic estimation methods is required to properly use
and apply reserves and resources definitions.
All estimates provided in the 51-101 Report and this release
have been made assuming that development of each property in
respect of which the estimate is made will occur, without
regard to the likely availability to the Company of the
funding required for that development.
Wind River is an oil and natural gas acquisition, exploration
and development company with a focus on domestic energy
projects within the United States. Wind River has oil & gas
leases on three properties located in the Wind River Basin of
Wyoming in addition to its four other project areas in
Colorado, New Mexico, Wyoming and Montana.
For further
information, please visit Wind River's website athttp://www.windriverenergy.com/ or contact: Paul
Cox, Director
Wind River Energy Corp.
1010-609 Granville Street
Vancouver, BC V7Y 1G5
T: (604) 689-0037
F: (604) 926-5806
E: paulcox@pilotagecc.com
FORWARD LOOKING INFORMATION
This press release contains forward-looking statements. The
use of any of the words "anticipate",
"continue", "estimate",
"expect", "may", "will",
"project", "should", "believe"
and similar expressions are intended to identify
forward-looking statements. Statements relating to
"reserves" or "resources" are deemed to
be forward looking statements, as they involve the implied
assessment, based on certain estimates and assumptions, that
the resources and reserves described can be profitably
produced in the future.
Although Wind River believes that the expectations and
assumptions on which the forward-looking statements are based
are reasonable, undue reliance should not be placed on the
forward-looking statements because Wind River can give no
assurance that they will prove to be correct. Since
forwardlooking statements address future events and
conditions, by their very nature they involve inherent risks
and uncertainties. These statements speak only as of the date
of this press release. Actual results could differ materially
from those currently anticipated due to a number of factors
and risks including various risk factors discussed in the
Company's Management's Discussion and Analysis for the Period
Ended September 30, 2010 as amended, filed on February 7,
2011 under the Company's profile on www.sedar.com.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS
RELEASE REPRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE
DATE OF THIS NEWS RELEASE AND, ACCORDINGLY, IS SUBJECT TO
CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE
IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY
UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY
MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS
INFORMATION ON AT ANY PARTICULAR TIME.
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