Monterey Exploration Ltd.
TSX : MXL

Monterey Exploration Ltd.

April 05, 2010 17:36 ET

Monterey Exploration Ltd. Announces Two Additional Successful Horizontal Well Completions in the Groundbirch Area of Northeast British Columbia

CALGARY, ALBERTA--(Marketwire - April 5, 2010) - Monterey Exploration Ltd. ("Monterey" or the "Corporation") (TSX:MXL) is pleased to announce two additional successful horizontal well completions in the Groundbirch area of Northeast British Columbia.

Monterey commenced fracture stimulation operations March 19, 2010 on two Montney horizontal wells that were drilled and cased in the first quarter. The first horizontal well to finish completion and flow testing was the 75 percent working interest well located at 13-27-80-21 W6M (the "13-27 well"). The 1,600 meter horizontal leg was fracture stimulated in six separate stages plus the initial toe frac utilizing slick water limited entry multi-stage fracture technology. The 13-27 well was flow tested up 4-1/2 inch casing and had a measured natural gas rate of approximately 6.0 million cubic feet per day ("mmcf/d") with a flowing wellhead pressure of 450 pounds per square inch ("psi") after 48 hours of continuous production testing. The well was still producing significant frac fluid at over 50 barrels per hour ("bbls/hr") at the end of the 48 hour flow period and is now shut-in for pressure buildup and analysis.

The second horizontal well completed was the 100 percent working interest well located at 2-21-80-21W6M (the "2-21 well"). The 1,600 meter horizontal leg was also fracture stimulated in six separate stages plus the initial toe frac utilizing slick water limited entry multi-stage fracture technology. The 2-21 well was flow tested up 4-1/2 inch casing and had a measured natural gas rate of approximately 7.0 mmcf/d, a flowing wellhead pressure of 520 psi and 60 bbls/hr of frac fluid after 34 hours of continuous production testing. With comparable results to the 13-27 well and deteriorating surface access conditions due to spring breakup, the well was shut in for pressure build up and all completion equipment, frac fluids and test equipment is currently being removed from both locations.

In the past 12 months, Monterey has drilled 3 horizontal test wells and two vertical stratigraphic wells across Monterey's operated land base at Groundbirch providing key data to evaluate the scale and full potential economic size of the Montney project. These latest two successful tests plus the first 100 percent working interest horizontal well located at 4-30-80-20 W6M that was drilled and completed in the fourth quarter of 2009 flowed at a total combined final clean up rate of approximately 20.0 mmcf/d net to the Corporation. The successful results at Groundbirch provide the footprint and compelling investment for the Corporation to continue to proceed with the initial development of the Montney project. This most recent data will be reviewed by Monterey's reserve evaluators in the following weeks and Monterey intends to complete an updated reserve report with respect to the Groundbich property.

The Corporation now has 5 (4 constructed) multi-well drilling pads with multiple drilling licenses on every pad to continue with the initial development of the Montney project. A drilling rig is currently racked in the Groundbirch field and is scheduled to commence operations on the next development wells once summer access is obtained. The Corporation has a drilling inventory in the Upper Montney formation alone of 75 (65 net) locations on the current landholdings. Surface construction and road access has been completed in respect of Monterey's previously announced plans for a 28 mmcf/d natural gas processing facility at Groundbirch (the "Groundbirch Facility").

Management is extremely pleased with all of the successful results obtained from development activities to date at Groundbirch. Once the Corporation has completed a new reserve assessment, it will be in a position to release full year capital and production guidance and details related to the construction, commissioning and start up of the Groundbirch Facility that is estimated to be completed by the end of this year.

Forward-looking Information and Advisories:
Certain information set forth in this press release constitutes forward-looking information within the meaning of applicable securities laws including the use and interpretation of the Corporation's well data and evaluation of the Groundbirch property, the future performance of the wells drilled at the Groundbirch property, the future drilling and completion operations of the Corporation at the Groundbirch property, the completion of an updated reserves report in respect of the Groundbirch property, the Corporation's plans for the construction, commissioning and start up of the Groundbirch Facility and the future release of full year capital and production guidance. Such statements are generally identified by the use of words such as "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "should", "plan", "intend", "believe" and similar expressions. Forward-looking information is subject to numerous risks and uncertainties, some of which are beyond the Corporation's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation, loss of markets, delays resulting from or the inability to obtain required regulatory approvals, inability to retain and delays in retaining drilling rigs and other services, currency fluctuations, imprecision of reserve and resource estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. The foregoing list is not exhaustive. Additional information on these and other risks that could affect the Corporation'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), or at the Corporation's website (www.montereyexploration.com). Readers are cautioned that the assumptions, including among other things, future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the cost of developing and expanding Monterey's assets; the ability to obtain equipment in a timely manner to carry out development activities; the ability to market our oil and natural gas successfully to current and new customers; the impact of increasing competition, the ability to obtain financing on acceptable terms; and the ability to add production and reserves through the development and acquisition activities used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking information. The actual results, performance or achievement of the Corporation could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits that the Corporation will derive therefrom. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

For information concerning risks associated with the recovery of resources in the Groundbirch area, see the Corporation's press release dated March 22, 2010.

Contact Information

  • Monterey Exploration Ltd.
    Patrick D. Manuel, P.Eng.
    President and Chief Executive Officer
    (403) 691-7725
    or
    Monterey Exploration Ltd.
    John S. Mah, C.A.
    Vice President, Finance & Chief Financial Officer
    (403) 691-7725
    www.montereyexploration.com