NuLoch Resources Inc.

NuLoch Resources Inc.

January 15, 2010 16:15 ET

NuLoch Resources Operational Update and Acquisition

CALGARY, ALBERTA--(Marketwire - Jan. 15, 2010) - NuLoch Resources Inc. (TSX VENTURE:NLR.A)(TSX VENTURE:NLR.B) is pleased to provide a production and operations update. The Company's current corporate presentation has been posted to its website at

Current Production

NuLoch has achieved a current production rate of 810 barrels of oil equivalent per day comprised of 52% light and medium oil and NGL and 48% natural gas. Production has increased by 43% compared to the 565 boe/d reported in February 2009. Currently, in North Dakota and Saskatchewan, four (1.3 net) Bakken-Sanish wells are being completed and two (0.8 net) wells are drilling.

Line of Credit

NuLoch's bank line of credit has been expanded to $8.5 million and is currently undrawn.

Saskatchewan Update

NuLoch drilled a 100% working interest Sanish Three Forks well in 17 days at
91/05-02-001-10W2 to a total depth of 3,427 metres that was rig-released on December 5, 2009. The well has a 2,272 metre true vertical depth and a 1,065 metre horizontal leg. NuLoch is taking a phased approach to the completion of this well. In late December, a water-based, 10 tonne, fracture stimulation was undertaken at the toe of the well over five separate stages spaced approximately 40 metres apart. The remaining 878 metre portion of the horizontal well was left uncompleted while results of the first five fracs are evaluated. To date, the well has flowed back frac fluid, formation water and light 40 degrees API crude oil. Since first oil was recovered on January 10, the well has flowed and swabbed-back a total of 348 barrels of light oil with associated solution gas and 678 barrels of water during 73.5 hours of operations. This equates to an average of 114 barrels of oil per day with a 66% water cut.

While these results are still preliminary, the Company is satisfied that the fracture program is effectively stimulating the Sanish formation. The remaining 878 metres of horizontal section are expected to be stimulated with 20 additional stages before the end of January.

This Sanish Three Forks oil completion in Saskatchewan is located approximately 8.5 miles from the known productive field in Divide County, North Dakota in which NuLoch has a 10% working interest in 20 producing Sanish Three Forks wells. The oil recovery from the current completion may represent a significant extension of the play.

NuLoch spud a second well (70% working interest) at 91/11-02-001-09W2 in December 2009, on the eastern edge of the Company's land block, six miles from the 05-02 well. Core samples have been obtained from both the Sanish Three Forks and Middle Bakken formations and the Company is currently drilling a horizontal leg in the Middle Bakken. A successful result may lead to follow-up locations in Saskatchewan and on the Company's 10% working interest acreage in North Dakota.

After the 11-02 Middle Bakken well is drilled, the rig is scheduled to move four miles west to 91/16-06-001-09W2 (70% working interest), flanking the 05-02 well to drill horizontally in the Sanish Three Forks. NuLoch has four additional Sanish Three Forks locations licenced for drilling on lands in proximity to the 05-02 well.

North Dakota Operations

New production has been added in Divide County since the closing of the acquisition on October 26, 2009. As reported in NuLoch's Q3 2009 interim report, the Company's first participation well averaged 300 b/d of light oil over 30 producing days. Since then, two more Sanish Three Forks wells have individually averaged 190 b/d and 460 b/d of crude oil over 30 production days. A fourth well has been fracture simulated and is flowing back while two additional wells await completion. A seventh well is currently drilling. NuLoch holds a 10% working interest in all of these wells.

The Company's Divide County property will see an increase in drilling activity with the addition of a second rig expected in February 2010. Current plans have up to 24 horizontal participation wells being drilled in 2010 targeting oil reserves in the Middle Bakken and Sanish Three Forks formations. Several of these wells are expected to be 2 miles long with 28 stage completions.

NuLoch has also acquired an ownership in 240 square miles of recently shot, high resolution, 3D seismic data that covers a large portion of the Divide County land base. This seismic will assist in the selection of Bakken and Three Forks Sanish locations but will also be used to identify other prospective horizons in this oil rich basin.

Acquisition - Burke County, North Dakota

NuLoch has been actively reviewing opportunities in the Williston Basin and, this month, has agreed to acquire production and undeveloped land in Burke County, North Dakota for US$3.1 million with closing of the transaction expected during January 2010. Burke County is adjacent to the Company's existing land position in Divide County.

NuLoch is acquiring a 30% working interest in 23,000 undeveloped acres (6,900 net) and three Bakken/Sanish oilwells that produce 15 b/d net to NuLoch. The vendor is a major independent US company that will continue to operate and hold a 40% working interest in the property. The lands are positioned in a contractual area of mutual interest and are prospective for Middle Bakken and Sanish Three Forks light oil reserves. A two-mile horizontal well with multi-stage completions targeting the Middle Bakken formation is planned for the first half of 2010. The acquisition increases NuLoch's net undeveloped land position in prospective Bakken and Sanish fairways to 64,000 acres consisting of 33,000 in Saskatchewan and 31,000 in North Dakota.


Use of Barrels of Oil Equivalent (boe)

Disclosure provided herein in respect of boe units may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf of natural gas to 1 bbl of crude oil is based on an energy equivalency conversion method primarily applicable at the burner tip and may not represent a value equivalency at the wellhead.

Forward-Looking Statements

Certain statements in this document or incorporated herein by reference constitute "forward-looking statements". These forward-looking statements can generally be identified as such because of the context of the statements, including words indicating that the Company "believes", "anticipates", "expects", "plans" or words of a similar nature. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions which will, among other things, impact demand for and market prices of the Company's products; industry capacity; the ability of the Company to implement its business strategy, including exploration and development activities; the ability of the Company to complete its capital programs; successful negotiations with bankers and other third parties; the success of exploration and development activities; production levels; government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations); asset retirement obligations; and other circumstances affecting revenues and expenses.

Neither 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

  • NuLoch Resources Inc.
    R. Glenn Dawson
    President and CEO
    (403) 920-0455
    (403) 920-0457 (FAX)
    NuLoch Resources Inc.
    2200, 444 - 5th Avenue SW
    Calgary, Alberta T2P 2T8