CALGARY, ALBERTA--(Marketwired - Feb. 12, 2014) - Amarok Energy Inc. ("Amarok" or the "Corporation") (TSX VENTURE:AMR) wishes to provide an update on its current operations and strategic direction.
Amarok recently drilled 2 wells (1.0 net) and recompleted 1 well (0.5 net) in Wyoming.
The first well drilled was the Lake Creek 21 well. The total estimated cost of the well based on the AFEs from the operator is USD$1.23 million (USD$620,000 net). The well was on production as of January 20, 2014. Based on preliminary field estimates provided by the operator, the Lake Creek 21 well had initial production of approximately 50 bbls of oil per day and has produced at a rate of 39 bbls/d (19.0 net) of 27° API asphaltic sour crude at a 20% oil cut, over the first 20 days. The production is coming from the upper Tensleep Zones using a conventional pumping unit. The operator is reviewing the possibility of increasing production from the well through the activation of a lower Tensleep zone, as well as switching to an electric submersible pump.
The second well drilled was the Lake Creek 22A well. The total estimated cost of the well based on the AFEs from the operator is USD$1.66 million (USD$830,000 net), which also includes a side tracking operation. The recompletion operation was completed on the Zimmerman Butte 6 well. The total estimated cost of the operation based on the AFE from the operator is USD$354,500 (USD$177,250 net).
Completion reports for the Lake Creek 22A and the Zimmerman Butte 6 wells are being reviewed by Amarok at this time and the test results will be publicly released in the near future, once analyzed. The operator expects these wells to be on production in March 2014, subject to power being installed on location.
The total net production to the Corporation from its Wyoming assets averaged approximately 39 bbls/d in January 2014 and is currently approximately 45 bbls/d at a 1% level oil cut based on February 7, 2014 field estimates provided by the operator. The foregoing does not include any production from the Lake Creek 22A well and the Zimmerman Butte 6 well. The production levels are expected to vary significantly over the next few months as wells are shut in for testing and placing the new wells on full production.
The Corporation previously announced that it planned to drill a well in Montana, USA in early Q1 2014 whereby Amarok would earn a 50% working interest in approximately 37,000 gross acres (18,500 net). The Corporation determined not to commence drilling the well by the January 31, 2014 deadline. Based on further technical review and a significant increase in estimated well costs, it was determined not to negotiate a further extension of the agreement to earn an interest in the property.
Amarok estimates that its current cash balance, net of currently anticipated capital commitments, is approximately $15.5 million. To date approximately $4.3 million has been allocated to Wyoming through Amarok's previously announced asset acquisition and recent drilling and recompletion operations as well as $1.6 million on other projects including the foregoing Montana farmin opportunity, due diligence operations in Belize, and land leases acquired in Montana.
Amarok is pleased to announce that Mr. Dennis Nerland, Q.C., has been appointed as President and Chief Executive Officer of Amarok, on an interim basis, pending the completion of a search for a new CEO.
Amarok's VP Finance and CFO, Mr. Murray Hinz, has advised that he will be resigning effective as of February 15, 2014. Amarok would like to thank Mr. Hinz for his service.
Amarok expects to continue operations as previously announced in Wyoming, and review its commitments regarding existing properties and will continue to search for new oil and gas opportunities in North America along with a management team.
Amarok is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas in North America.
Cautionary Statement on Forward-Looking Statements and Information
This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking information or statements. In particular, forward-looking statements and information in this press release include, but are not limited to: the possibility of increasing production in the Lake Creek 21 well; the instillation of power to and the commencement of production from the Lake Creek 22A well and the Zimmerman Butte 6 well; Amarok's currently anticipated capital commitments; and Amarok's search for new oil and gas opportunities accompanied by a strong management team. The forward-looking statements and information contained in this press release are based on certain key expectations and assumptions made by Amarok. Although Amarok believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward-looking statements and information because there can be no assurance that they will prove to be correct.
Since forward-looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to: operational risks in development, exploration and production of oil and gas; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; health, safety and environmental risks; commodity price and exchange rate fluctuations; marketing and transportation; loss of markets; environmental risks; competition; incorrect assessment of the value of acquisitions; ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws, royalties and environmental regulations. Readers are cautioned that the foregoing list of factors is not exhaustive.
Management has included the above summary of assumptions and risks related to the forward-looking statements and information provided in this press release in order to provide a more complete perspective on the ongoing operations of Amarok and such information may not be appropriate for other purposes. Actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and information and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements and information contained in this press release will transpire or occur, or if any of the them do so, what benefits may be derived therefrom.
Readers are cautioned that the test result from the Lake Creek 21 well is not necessarily indicative of long-term performance or of ultimate recovery.
The forward-looking statements and information contained in this press release are made as of the date hereof and Amarok undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events, or results or otherwise, other than as required by applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provided (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.