Redcliffe Exploration Inc.
TSX VENTURE : RXP.A
TSX VENTURE : RXP.B

Redcliffe Exploration Inc.

October 29, 2009 10:54 ET

Redcliffe Announces $8 Million Winter Capital Program

CALGARY, ALBERTA--(Marketwire - Oct. 29, 2009) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Redcliffe Exploration Inc. (TSX VENTURE:RXP.A) (TSX VENTURE:RXP.B) ("Redcliffe" or the "Company") is pleased to announce an $8 million winter capital program for Q4 2009 and Q1 2010. This capital program will be focused in the Company's core gas area in the Gold Creek/Wapiti/Karr regions of northwestern Alberta, and in the developing Cardium horizontal oil play in the Pembina area of central Alberta.

Redcliffe currently owns interests in over 100 sections of land in the Peace River Arch multi-zoned gas basin, centered by its Gold Creek/Wapiti production. This winter's capital program will focus the Company's Montney and Nikanassin gas potential in this area, and is being driven by anticipated strengthening gas prices in 2010 and by the recent nearby successes of intermediate and larger sized competitors.

In the Karr area, Redcliffe plans to drill two vertical wells offsetting the four existing and three additional planned horizontal wells of an intermediate gas producer. These two vertical wells, while also targeting up-hole gas horizons, will primarily target the Montney sand. The Montney potential has already been established by these adjacent horizontals that have test rates of up to 5 mmcfpd with associated liquids. Both wells will be cored for reservoir optimization purposes. Depending upon the outcome of a drilling option in the Gold Creek area currently being seismically evaluated, Redcliffe may allocate additional funds to the Karr area and convert one of these vertical tests to a horizontal drill. This determination will be made prior to year-end. Redcliffe maintains an approximate 90% working interest in the 15 sections of land over this prospect.

In the Wapiti area, Redcliffe will drill a vertical Nikanassin test on a recently acquired 100% working interest four-section block of land. This test well, if successful, will be the fourth Nikanassin producer for the Company. Like the Montney Formation at Karr, the Nikanassin Formation represents a resource-style play that offers upside from natural gas prices combined with the predictable nature of a large gas deposit developed utilizing horizontal drilling and multi-staged stimulation techniques. While Montney shale and sand deposits are exclusively being developed at this time utilizing multi-staged horizontal fracture techniques, to our knowledge the Nikanassin has yet to be tested horizontally in the immediate area, although other operators have recently licensed horizontal wells nearby. Vertical wells drilled to the north and utilizing optimized fracture completion techniques have achieved initial rates in the 3 to 5 mmcfpd range. Redcliffe estimates that it has exposure to Nikanassin potential in approximately 82 sections in this core area at an average controlled working interest of 63%.

In the Gold Creek area, Redcliffe has a number of wells planned, subject to partner approvals and the completion of an analysis of a recently acquired seismic program. These wells range in working interest from 30% to 72%. Confirmation of scheduling for these wells for 2010 drilling will be made over the next 30 days.

Redcliffe plans to drill at least one horizontal Cardium well prior to year-end in Pembina. Recent drilling offsetting the Company's lands has resulted in initial rates over 250 bopd with the ultimate potential of drilling 2 to 4 wells per section. Two recent horizontal wells have been drilled directly offsetting Redcliffe's lands. This play is drawing significant attention due to both its areal extent and the potential reserves per section of 400,000 to 600,000 barrels. Redcliffe has 12 sections of land with Cardium potential at an average working interest of 65%.

After a time of distressed natural gas pricing and resultant limited capital activity during the first three quarters of 2009, we are excited to recommence drilling activity at a meaningful level in anticipation of improved commodity prices through 2010. With our extensive land inventory and Montney/Nikanassin potential, we look forward to developing our assets for significant growth during the second half of 2010.

Redcliffe is a Calgary based company exploring for oil and gas in Alberta. The Company has a significant undeveloped land base in the Peace River Arch south of Grande Prairie. Production is focused in the Gold Creek/Wapiti area of northwestern Alberta and the Pembina area of central Alberta. Redcliffe averaged production of 1,043 boepd during the first half of 2009. Production for the third quarter of 2009 has been reduced to approximately 850 boepd due to shut-ins and delayed tie-ins of new wells as a result of low gas prices. Recent decisions by operators to bring production back on stream and to tie-in new wells caused by recent gas price increases is anticipated to increase Redcliffe's production to above 1,000 boepd in November.

Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations, and capital expenditures and the timing thereof, that involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond the Company's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing 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, the United States and overseas, 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. The Company'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 so, what benefits that the Company will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect the Company's operations and financial results are included in reports, including the Company's annual information form for the financial year ended December 31, 2008, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to the Company 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 the Company 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.

BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Redcliffe Exploration Inc.
    Daryl H. Connolly
    President & CEO
    (403) 539-8440
    (403) 539-8433 (FAX)
    dconnolly@redcliffe.ca
    or
    Redcliffe Exploration Inc.
    George Gramatke
    Vice President, Finance & CFO
    (403) 539-8442
    (403) 539-8433 (FAX)
    ggramatke@redcliffe.ca