Longbow Resources Inc.

Longbow Resources Inc.

October 02, 2007 18:32 ET

Longbow Resources Inc. Operational Update: Production Now 70% Oil

CALGARY, ALBERTA--(Marketwire - Oct. 2, 2007) - Longbow Resources Inc. (TSX VENTURE:LBR) ("Longbow" or the "Company") is pleased to announce that workovers on its recently acquired Byemoor property are providing incremental production exceeding the Company's original expectations. The Company's current daily production is now 70% oil and 30% natural gas.

Byemoor: 100% owned and operated.

A workover and stimulation conducted on a well at Byemoor, which was shut-in due to rod failure prior to the Company's acquisition, is now on production. The well is still flushing with approximately 20 bopd and is expected to stabilize at approximately 15 bopd. A second shut-in well has also been brought back on production with stabilized production of approximately 20 bopd before workover and stimulation. All of this production is incremental to the 180 boepd that the Byemoor field was producing at the time of the Company's acquisition. This second well is going to be the next in a planned four well stimulation workover program at Byemoor. Based on the Company's experience to date with the Byemoor property, scaling and migrating fines in the formation appear to decrease productivity over time. Accordingly, in order to improve production, the Company plans to conduct similar workovers on all of the remaining thirteen wells at Byemoor. The first four workovers have begun and are planned to be completed by the end of November. Each workover is anticipated to cost approximately $120,000 with incremental production from each well expected to be within the 10 to 15 bopd range.

Longbow has engaged Sproule Associates to conduct a reservoir simulation study which will ultimately forecast production profiles and recovery factors for a number of production scenarios, including various densities of horizontal infill drilling and the implementation of a pressure maintenance scheme in the Byemoor field. The results of this study are expected by year end.

With regard to new drilling locations, two horizontal infill development well locations have been surveyed. Regulatory approval is expected by November 1st. The first horizontal well is planned to be drilled, completed, and on production by year end. Pending results, the second location will be drilled, completed, and on production in the first quarter of fiscal 2008. Under the current approved spacing at Byemoor, Longbow can drill up to eight horizontal wells in the northern pool and three horizontal wells in the southern pool.

Longbow is in the process of conducting industry and landowner notification of a holding application, which will be submitted to the EUB within the month of October. Upon EUB approval of the holding, an additional 10 horizontal wells could be drilled bringing to 21 the total number of potentially drillable locations on the Byemoor property.

Lone Pine Creek:

The Lone Pine opportunity is the first of two (Lone Pine/ Elmworth) 100% owned and operated, high impact, prospects in Longbow's portfolio. The Lone Pine prospect features two stacked zones targeting potential ultimate recovery in the 4 to 8 BCF range per zone. Three analogous wells in the surrounding area averaged over 800 boepd in their first year of production. The Company has surveyed the surface location and the process of public consultation and notification has begun. Provided there are no objections, Longbow expects to have the well location licensed and spudded by Nov 30th, subject to rig availability.


Longbow is currently surveying the tie-in pipeline route and purchasing well site equipment for one of two successful wells in the Thorsby area. Field equipping and construction of the well site facilities and tie-in pipeline is expected to take place in November with production commencing shortly thereafter. The second well is now tied in and expected to go on production in October. Longbow's net production from these two wells is expected to be approximately 100 boepd.

Certain statements contained herein may constitute forward-looking statements. These statements relate to future events or our future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. We believe that the expectations reflected in the forward-looking statements are reasonable based upon management's current views but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. No assurance can be given that actual results, performance or achievement expressed in, or implied by these forward-looking statements will occur, or if they do, that any benefits may be derived from them. Past results have been applied in drawing a conclusion or making a forecast or projection set out in the forward-looking information. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet per barrel (6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. All boe conversions herein are derived from converting gas to oil in the ratio mix of six thousand cubic feet of gas to one barrel of oil.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

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