Open Range Energy Corp.
TSX : ONR

Open Range Energy Corp.

March 31, 2010 17:53 ET

Open Range Energy Corp. Announces Strong First Quarter Test Results and 4,000 Boe Per Day Production Milestone

CALGARY, ALBERTA--(Marketwire - March 31, 2010) - Open Range Energy Corp. ("Open Range" or the "Company") (TSX:ONR) is pleased to announce positive results from four (2.6 net) wells that were recently completed as part of the Company's first-half 2010 capital program and that the Company has achieved the 4000 boe per day production milestone. Highlights of the four wells:

- 100 percent multi-zone vertical Deep Basin discovery well at Ansell/Sundance tested in mid-March at up to 12.0 mmcf per day plus natural gas liquids;

- 37.5 percent Cardium horizontal oil well in west central Alberta tested in mid-March at up to 1,350 bbls per day gross, recovering completion fluids over a three day period;

- 20 percent Glauconitic horizontal Deep Basin well at Ferrier tested in mid-March at 3.7 mmcf per day gross plus natural gas liquids of approximately 40-50 bbls per mmcf; and

- 100 percent horizontal Notikewin well is currently undergoing completion operations. Pending successful completion operations and weather conditions, the well is expected to be production tested and brought on-stream in early April.

At net working interests and initial production rates upon tie-in, the 2.6 net wells identified above are expected to add materially to Open Range's daily volumes. The 100 percent vertical Deep Basin well has recently been tied-in and is currently producing at 3.7 mmcf per day plus over 50 bbls per day of natural gas liquids (approximately 670 boe per day).

The fifth well in the Company's first-half 2010 capital program, a 60 percent working interest Bluesky horizontal at Ansell/Sundance, was suspended following partial completion operations pending spring break-up and further technical evaluation.

The Company has current production of over 4,000 boe per day (90 percent natural gas), a new milestone for Open Range, of which over 3,600 boe per day is at Ansell/Sundance. The Company's first-half 2010 average production forecast of 3,600 boe per day will be revisited upon completing further tie-ins and accumulating several weeks of new well production data.

ANSELL/SUNDANCE DRILLING RESULTS

100-PERCENT MULTI-ZONE VERTICAL DISCOVERY WELL

Open Range spudded the first multi-zone vertical well of its 2010 capital program in late January. The 100 percent working interest vertical exploratory well was drilled to a total measured depth of almost 3,100 metres and was cased by late February.

In mid-March Open Range executed successful completion operations, fracture-stimulating six zones. The well was tested up 4 1/2" casing, flowing at initial cleanup production rates of up to 12.0 mmcf per day over 53 hours. Flow rates over the last 24 hours of this initial test period averaged 6.5 mmcf per day at a flowing casing pressure of 650 psi. The well was tied into the recently expanded, Company-operated Ansell/Sundance 9-34 natural gas plant in late March and is currently producing at a rate of 3.7 mmcf per day plus natural gas liquids (670 boe per day net) at a flowing tubing pressure of 550 psi. Recovery of fracturing fluids is continuing. Open Range has identified multiple offset locations and recently increased its land position in the immediate area to 5 gross (5 net) sections.

NOTIKEWIN & BLUESKY HORIZONTAL WELLS

Completion equipment and operations were moved to the Company's second 100 percent working interest horizontal Notikewin well in late March. Open Range is currently executing multi-stage fracturing and completion operations on the well. Pending successful completion operations and weather conditions, the well is expected to be production tested before spring breakup. Immediately following production testing, the well is expected to be brought on-stream through the 9-34 gas plant.

The Notikewin well was spudded in early February and drilled to a total measured depth of almost 4,200 metres including a horizontal leg of 1,250 metres. Drill costs were $2.7 million and royalty credit recovery is estimated to be $4.1 million. This was Open Range's second consecutive Notikewin horizontal well. As we announced in our operational update of February 18, the first Notikewin horizontal well tested on cleanup at rates up to 5.4 mmcf per day over 60 hours. The well was tied into our 10-11 compressor in February and is currently producing at a rate of 1.7 mmcf per day plus natural gas liquids.

The Company's 60 percent Bluesky horizontal well was drilled to a total measured depth of 4,100 metres, including a 900-metre horizontal leg, and commenced completion operations in early March. Fracture stimulation was initiated in five intervals. The Company's attempt to fracture stimulate the reservoir over the furthermost 300 metres of the horizontal leg met with limited success. Open Range and its partner jointly decided to suspend completion operations and fully analyze all field data before attempting further fracture stimulation techniques on the remaining 600 metres of the horizontal leg. Completion operations are expected to resume following spring break-up pending the outcome of the technical evaluation.

CARDIUM OIL HORIZONTAL DRILLING RESULTS

Open Range is pleased to report on its initial drilling results in the emerging horizontal Cardium light oil play in west central Alberta. The Company's first horizontal Cardium oil well (37.5 percent working interest) was drilled in late February. The well initially flowed at rates up to 1,350 boe per day during the first three days, recovering completion fluids following the successful multi-stage fracturing operations executed in early March.

The well was brought on pump in mid-March at an initial average rate of approximately 250 bbls per day (94 bbls per day net) over a four day period before being temporarily shut-in following testing for royalty benefit reasons. The well is scheduled to commence production in early April. Estimated gross costs to drill and complete this well are approximately $2.6 million. Follow-up locations are currently being evaluated. Open Range has 3 gross (0.8 net) sections of Cardium rights in this region.

GLAUCONITIC HORIZONTAL DRILLING RESULTS

The Company recently participated in the drilling and completing of one horizontal Glauconitic natural gas well (20 percent working interest) at its Ferrier property for an estimated gross cost of approximately $2.5 million. The 3,400-metre well was drilled to a true vertical depth of approximately 2,060 metres, with a 1,300-metre horizontal leg. The well was completed in mid-March and tested on cleanup at rates up to 3.7 mmcf per day plus natural gas liquids of approximately 40-50 bbls per mmcf (750-800 boe per day gross). Flow rates over the last 24 hours of this initial test period averaged 3.5 mmcf per day at a flowing tubing pressure of 1500 psi. The well is scheduled to be tied-in and on-production by the end of July. Follow-up locations are being evaluated on the Company's land base at Ferrier.

OUTLOOK

Open Range is very pleased with the early results of its first half capital program and the increased cash flow being generated from average daily production in excess of 4,000 boe per day. The Company will revisit first-half 2010 production guidance following completion of tie-ins and accumulation of production data from the four gross wells tested since the Company's mid-February operational update. The Company has one further well planned to complete its first-half 2010 capital program, a multi-zone vertical well at Ansell/Sundance that is to be drilled following spring break-up. First half 2010 capital spending remains on-track to meet the originally budgeted $30 million.

OPEN RANGE ENERGY CORP. IS A PUBLICLY TRADED CANADIAN ENERGY COMPANY WITH FOCUSED OPERATIONS IN THE DEEP BASIN REGION OF ALBERTA.

OPEN RANGE HAS APPROXIMATELY 60.9 MILLION COMMON SHARES ISSUED AND OUTSTANDING, WHICH TRADE ON THE TSX UNDER THE SYMBOL "ONR".

Reader Advisory

This news release contains certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; and (v) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Open Range's control. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Open Range's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, Open Range will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to Open Range or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Open Range does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Disclosure provided herein in respect of barrel(s) of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of 6 mcf:1 barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

THE TORONTO STOCK EXCHANGE HAS NEITHER APPROVED NOR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.

Contact Information

  • Open Range Energy Corp.
    A. Scott Dawson, P.Eng.
    President and Chief Executive Officer
    403-205-3704
    or
    Open Range Energy Corp.
    Lyle D. Michaluk, CA
    Vice President, Finance and Chief Financial Officer
    403-262-9280
    www.openrangeenergy.com