Culane Energy Corp.
TSX VENTURE : CLN

Culane Energy Corp.

November 11, 2009 13:53 ET

Culane Receives Waterflood Approval

CALGARY, ALBERTA--(Marketwire - Nov. 11, 2009) - Culane Energy Corp. ("Culane" or the "Company") (TSX VENTURE:CLN) is pleased to announce that it has received regulatory approvals for four water flood applications submitted by Culane for its Killam project, in the first and second quarters of 2009. As previously announced by Culane, the regulator releases water flood approvals without any advance notice to the operator. This being the case, Culane commenced development of its water injection facilities as of mid July. After the lease preparation, pipeline surveying and all major equipment was procured, the water injection facility and pipeline construction had commenced on August 24th. By the end of September, the Killam water flood injection facility construction was completed.

With the completion of the water injection facilities and government approval of its water flood applications, Culane intends to increase water injection rates from approximately 1,250 up to 6,000 barrels per day essentially recharging the reservoir by increasing the reservoir pressure and subsequently reversing the oil production decline that occurred during the primary production phase of the reservoir. This will be achieved through a combination of vertical well injectors and converted horizontal wells. When Culane has replaced sufficient reservoir voidage and a clear increase in reservoir pressure and well fluid levels is observed, Culane intends to introduce surfactant polymer to the water flood. Existing pool analogies indicate that the addition of surfactant polymer has the potential to increase the oil recovery factor to in excess of 40%. The "Discovered Petroleum Initially-in-place" at Killam net to Culane's interest is estimated at approximately 42 million barrels of 24 API oil.

Culane views the Killam project as a solid low risk growing production base that along with rising oil prices will not only fund, but accelerate the next stage of growth for the Company. In January of 2009, Culane commenced an active full cycle oil exploration initiative in Western Canada. Culane previously announced completion of a flow through financing of $3 million at $ 2.15/share. The proceeds of this financing will be used to fund Culane's new oil exploration initiative. Horizontal drilling locations have been selected, initial surface approvals have been acquired, and surveying is beginning with well licensing to follow. Culane anticipates it will begin drilling its new core area by early January.

Culane is an oil weighted company (72% oil, 28% natural gas), and because of this fact and in spite of the economic downturn over the past year, Culane has been able to take advantage of its stock buy back plan by purchasing and returning to treasury 723,500 common shares at an average price of $0.99 per share, construct its water injection facilities at Killam, and increase its land holdings in new oil prone areas, while at the same time continually reducing its debt. As of today's date, Culane's debt is approximately $12 million. Culane currently has approximately 24.5 million common shares outstanding.

About Culane Energy Corp.

Culane is a junior oil and gas company engaged in the exploration, development and production of oil and natural gas in Western Canada.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements. More particularly, this press release contains statements concerning anticipated results from the Company water flood program, oil recoverability, and anticipated exploration activities. The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Culane. Although Culane 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 Culane can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Certain of these risks are set out in more detail in Culane' Annual Information Form which has been filed on SEDAR and can be accessed at www.sedar.com.

The forward-looking statements contained in this document are made as of the date hereof and Culane undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

NEITHER THE 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 RELEASE.

Contact Information

  • Culane Energy Corp.
    Donald D. Staus
    President and Chief Executive Officer
    (403) 263-2773
    (403) 263-2776 (FAX)
    dstaus@culaneenergycorp.com
    or
    Culane Energy Corp.
    Stewart Larsen
    Vice President of Finance and Chief Financial Officer
    (403) 263-2773
    (403) 263-2776 (FAX)
    slarsen@culaneenergycorp.com
    or
    Culane Energy Corp.
    Thomas H. Field
    Vice President, Engineering and Operations
    (403) 263-2773
    (403) 263-2776 (FAX)
    tfield@culaneenergycorp.com
    or
    Culane Energy Corp.
    420, 333 - 5th Avenue S.W.
    Calgary, Alberta T2P 3B6
    www.culaneenergycorp.com