Tango Energy Inc.
TSX VENTURE : TEI

Tango Energy Inc.

July 15, 2009 16:44 ET

Tango Energy Inc.: Quaich 03-03 Flow and Buildup Tests & Operations Update

CALGARY, ALBERTA--(Marketwire - July 15, 2009) - Tango Energy Inc. ("Tango") (TSX VENTURE:TEI) Tango is pleased to report the results of a recently completed build up and flow test by the operator on Tango's Quaich prospect in the Southern Alberta Foothills Area.

The Cadomin B zone in the Quaich 03-03 well was suspended on June 19th and both a build up test on the Cadomin B zone and a flow test on the Cadomin C zone were conducted simultaneously in the Quaich 03-03 well. The purpose of the build up test was to evaluate the potential size of the reservoir in the Cadomin B zone before drilling the previously licenced Quaich 12-34 follow up well to the south of the 03-03 discovery well. Similarly, the purpose of the flow test on the Cadomin C zone was to determine the productive capability of that zone.

The build up test on the Cadomin B zone was conducted over a 9 day period. The pressures at the end of the test showed an extrapolated average reservoir pressure of 1,511 psia. This indicates there has been approximately 2% depletion from the original reservoir pressure of 1,541 psia after producing 0.35 billion cubic feet since December 21 2008. These results support the drilling of the planned follow up well at 12-34. Tango has received an Independent Operations Notice to drill the 12-34 well, which the operator anticipates will spud by the middle of August and should take approximately 35 days to drill.

The Cadomin C zone, which was never producing in this well, flowed at 1.5 million cubic feet per day of sales gas over an 8 day period, with a stabilized water gas ratio of approximately 200 barrels per million cubic feet. The natural gas and produced water were flowed down the pipeline to the plant where the gas was sold and the water disposed.

The 03-03 well was tied in and placed on production December 21 2008. The well was producing at restricted rates from the Cadomin B of 2.5 million cubic feet per day of sales gas. After the recent pressure and flow tests, the well was then placed back on production from the Cadomin B zone at the same curtailed production rates. The Cadomin C zone was suspended until gas prices improve, the operator and Tango determine the most economic way to handle the water production, or until the 12-34 well is drilled and evaluated.

Tango has a 60% interest in both the Quaich 03-03 well and the 12-34 follow up well. Tango and the operator have more than 6,880 acres of contiguous land in the immediate area in which Tango holds between a 50% and 60% working interest, In addition to this land position, the 12-34 well will validate and continue additional contiguous lands beyond their primary term. Tango will earn an undivided 30% interest in those lands.

Tango has temporarily suspended production from two minor producing properties in Ricinus and Beaton, and will continue to review property by property net backs going forward. Tango continues to pursue economic prospects developed by Tango, review corporate merger and acquisition opportunities while maintaining a strong balance sheet. Tango's website can be found at www.tangoenergy.com. Tango Energy Inc. is listed on the TSX-Venture Exchange under the Symbol TEI.

This release contains forward-looking information. By their nature, forward-looking statements involve assumptions and known and unknown risks and uncertainties that may cause actual future results to differ materially from those contemplated. These risks include such things as volatility of oil and gas prices, commodity supply and demand, fluctuations in currency and interest rates, ultimate recoverability of reserves, timing and costs of drilling activities and pipeline construction, new regulations and legislation and availability of capital. Tango does not undertake to update any such forward-looking statements except as required by law. Please refer to Tango's Annual Report for more detail as to the nature of these risks and uncertainties. Although Tango believes that the expectations represented by these forward looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Natural gas volumes have been converted to a barrel of oil equivalent ("boe") using six thousand cubic feet equal to one barrel unless otherwise stated. A boe conversion ratio of 6:1 is based upon an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. This conversion conforms with Canadian Securities Regulators National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Boe's may be misleading, particularly if used in isolation.

Funds flow from operations and funds flow from operations per share and netback are not recognized measures under Canadian generally accepted accounting principles. Management believes that these items are a useful measure of financial performance. Funds flow from operations is defined as net income plus non-cash charges including, depletion, depreciation and accretion, future taxes and stock-based compensation, after asset retirement costs. Funds flow from operations per share is calculated by dividing the weighted average number of shares outstanding during the year into funds flow from operations. Netback is the average per unit of volume for oil and gas revenues less royalties and production costs incurred. Netback is expressed in terms of dollars per boe.

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

Contact Information

  • Tango Energy Inc.
    Jeremy P. Newton
    President and COO
    (403) 266-5688
    (403) 266-8817 (FAX)
    or
    Tango Energy Inc.
    John M. Gunn
    CEO
    (403) 266-5688
    (403) 266-8817 (FAX)
    Website: www.tangoenergy.com