Turnkey E&P Inc.

Turnkey E&P Inc.

December 19, 2007 17:37 ET

Turnkey E&P Inc. Provides Clear Creek Well Test Data

CALGARY, ALBERTA--(Marketwire - Dec. 19, 2007) - Turnkey E&P Inc. ("Turnkey") (TSX:TKY), today provided an update on the wells drilled in the Clear Creek Field.

Clear Creek Field in Beauregard Parish, Louisiana

Turnkey recently completed drilling operations on three wells in its Clear Creek Field. Two wells, the P. Cox #1 and the P. Cox #2, are direct offsets to the discovery well, the W. Cox #1 which was put on production from the B-6 zone on October 29, 2007 and is currently flowing 125 barrels of oil per day and 425 thousand cubic feet of gas per day.

After extensive tests on the P. Cox #1 well, the B-3 and B zones produced at rates that were not commercial. The B-6 zone was not encountered in the wellbore. The A zone, which is the primary zone in the field, gas-lift tested 4% oil cut on a total fluid rate of approximately 500 barrels per day. Turnkey is evaluating the feasibility of commencing a waterflood pilot project in the A zone and converting this well into a water injection well, but in the meantime will place it on production.

The P. Cox #2 well encountered the A, B and C zones, but did not encounter the B-6 zone. The C zone flow tested 2-3% oil cut on a total fluid rate of about 450 barrels per day. The B zone flow tested 4% oil cut on a total fluid rate of approximately 400 barrels per day. Both the B and C zones will be put on production through the long string as the well has been dual-string completed. The A zone is expected to be tested next week after finalizing the installation of equipment for gas lifting.

The Temple-Inland #1 well was drilled approximately three miles to the west of the W. Cox #1 well. The well encountered the A, A-1, B-3 and C zones. All four zones produced only traces of oil. The well has been temporarily abandoned pending further evaluation of these zones as well as the deeper Wilcox formation.

The company will postpone further drilling in the Clear Creek field until the cores taken in the P. Cox #2 well have been evaluated and some production history is accumulated. Turnkey believes there is good potential in the deeper Wilcox formation below the Cockfield. After further evaluation of these deeper prospective zones, the company anticipates drilling future wells into the Wilcox which is approximately 2,000 feet below the Cockfield. This approach will allow Turnkey the opportunity to continue to evaluate the Cockfield zones on the way down to the Wilcox. In addition, the five wells drilled to date in the Clear Creek Field can all be deepened into the Wilcox zone for minimal costs.

"While we are disappointed with our current test results, we remain positive about the long-term opportunities of Clear Creek and the impact Casing Drilling® technology can have on difficult fields such as Clear Creek," commented Bob Tessari, Turnkey's President and CEO. "First, we need to gather additional information to assess the complex geology we have encountered. There are still unanswered questions as to why these hydrocarbon bearing sands are not productive. We plan on performing additional workovers and more evaluation to unlock the potential we believe is in the Cockfield sands," Tessari said.

Hurricane Creek in Beauregard Parish, Louisiana

Turnkey spudded the McPherson #1 well on December 16, 2007. This is the initial well to be drilled under the Farmin Agreement from McGowan Working Interest Partners covering the 2,800 acre Hurricane Creek Unit. Turnkey has the option to drill a well every 90 days to earn acreage in the Unit which Turnkey can exercise until it has earned all prospective acreage.

Magnolia City Field in Jim Wells County, Texas

Turnkey has been focusing on acquiring acreage in South Texas where Casing Drilling® has been and continues to be very successful in reducing well costs and enhancing production. To this end, and in addition to the Saldana lease, Turnkey has acquired leases comprising 1,250 acres in the Magnolia City Field. This acreage is near the Stratton Field where Turnkey's Casing Drilling® has been applied successfully to reduce drilling costs by 30% and substantially improve production from the multiple depleted zones.

Turnkey E&P Inc. is a drilling and completions contractor and an independent oil and gas company that is focusing its oil and natural gas drilling and exploitation and production activities in the continental United States using Casing Drilling® technology. Casing Drilling® is a registered trademark of Tesco Corporation. Additional information about Turnkey can be found at its website: www.turnkeyep.com.

This release and the Company's website referenced in this release contain forward-looking statements including expectations of future production and components of cash flow and earnings. Investors are cautioned that
assumptions used in the preparation of such information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Turnkey. These risks include, but are not limited to; the risks associated with the oil and gas industry, commodity prices and exchange rate changes. Industry related risks could include, but are not limited to; operational risks in exploration, development and production, delays or changes in plans, risks associated to the uncertainty of reserve estimates, health and safety risks including, without limitation, blowouts and spills, and the uncertainty of estimates and projections of production, costs and expenses. The risks outlined above should not be construed as exhaustive. Investors are cautioned not to place undue reliance on any forward-looking information. Turnkey undertakes no obligation to update or revise any forward-looking statements except as required under applicable securities laws.

Contact Information

  • Turnkey E&P Inc.
    R. M. (Bob) Tessari
    President and Chief Executive Officer
    (281) 248-8822
    Website: www.turnkeyep.com