Artek Exploration Ltd.
TSX : RTK

Artek Exploration Ltd.

November 28, 2011 16:47 ET

Artek Exploration Ltd. Provides Operations Update and Announces New Doig Liquids Test Rates at Inga

CALGARY, ALBERTA--(Marketwire - Nov. 28, 2011) - Artek Exploration Ltd. (TSX:RTK) ("Artek" or the "Company") is pleased to provide the following operational update.

The Company has successfully drilled and completed two new horizontal wells (60% working interest) at its Doig natural gas and condensate pool in the Inga area of British Columbia. The wells are step-outs to its first two horizontal Doig wells in the pool which tested at an average rate of approximately 1,960 boe/d of which approximately 1,250 bbl/d was condensate. The two new wells were drilled from a common pad but tested and validated two independent drill spacing units. After a 48 hour clean-up test period, the first horizontal well was flowing at an average rate of approximately 4.7 mmcf/d of natural gas (of which approximately 60% was formation gas and 40% was load) and 1,033 barrels of condensate per day, or a total of 1,815 boe/d over the last seven hours of the test at a flowing pressure of 386 PSI. The well validated the productivity of the reservoir in a portion of the pool that Artek would generally describe as finer grained and lower permeability. The second horizontal well flowed after a 72 hour cleanup test period at an average restricted rate of approximately 7.5 mmcf/d of natural gas (of which approximately 74% was formation gas and 26% was load) and 1,062 bbl/d of condensate or a total of 2,312 boe/d over the last seven hours of the test at a flowing pressure of 1,338 PSI. The laterals were drilled to 1,119 metres and 1,259 metres respectively (approximately 3,100 metres of total measured depth) and each was stimulated using a 15 stage hydrocarbon frac program. The average liquids ratio for the two wells over the last seven hours of the tests was significant at approximately 278 bbl/mmcf of formation natural gas. Artek expects liquids yield ratios to decline over time as vertical wells in the Doig pool produce at yields in the 50 to 100 bbl/mmcf range long term.

The two step-out wells extend the productive trend further south of existing vertical and horizontal well control and establishes significant productivity in the areas of the Doig sand trend that exhibit lower permeability characteristics. The Company has compiled 29 gross (21 net) sections of land on the Doig trend and believes that the additional test results and mapping support at least 42 gross (25 net) horizontal well locations. The number of locations corresponds to less than 3 horizontal wells per mapped section. The recent results from the lower permeability rock and the high liquids ratios encountered in the pool so far suggest that an even greater horizontal well density may be required to optimize the recovery factor of the natural gas and condensate from the pool.

The Company has recently completed the expansion of its operated Inga facility, where it drops out the majority of the liquids, from 6.5 to 16 mmcf/d of processing capacity to accommodate the new volumes. After flowing through the Inga facility, Artek sends its natural gas to a third party facility where it recovers another 15 bbls/mmcf of liquids. Longer term, the Company plans to construct a relatively short sales pipeline to access additional third party capacity at a deep cut facility as volumes continue to grow from its Inga natural gas and condensate pool.

The Company is pleased with these new results and management believes it will comfortably meet or exceed its 2011 exit guidance of approximately 2,900 to 3,100 boe/d. The Company anticipates releasing 2012 capital expenditure and production guidance within the next several weeks as Artek will be in a better position to forecast the long term capability of the new wells and our expanded facility.

ADVISORIES

Forward Looking Statements: This press release contains forward-looking statements. Management's assessment of future plans and operations, production estimates, initial production rates, 2011 year-end production guidance, drilling plans, number of well locations, well spacing, timing of drilling and tie-in of wells, and pipeline construction plans at Inga, may constitute forward-looking statements under applicable securities laws and necessarily involve risks and uncertainties, some of which are beyond Artek's control, including without limitation, risks associated with oil and 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. As a consequence, the Company's actual results may differ materially from those expressed in, or implied by, the forward looking statements. Forward looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect. Although Artek believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because the Company can give no assurance that such expectations will prove to be correct.

In addition to other factors and assumptions which may be identified in this document and other documents filed by the Company, assumptions have been made regarding, among other things: the impact of increasing competition; the general stability of the economic and political environment in which Artek operates; the ability of the Company to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects which the Company has an interest in to operate the field in a safe, efficient and effective manner; Artek's ability to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development or exploration; the timing and costs of pipeline, storage and facility construction and expansion; the ability of the Company to secure adequate product transportation; future oil and natural gas prices; currency, exchange and interest rates; the regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and Artek's ability to successfully market its oil and natural gas products. 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 on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com) or at the Company's website (www.artekexploration.com). Furthermore, the forward looking statements contained in this document are made as at the date of this document 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 Conversions: Barrel of oil equivalent ("BOE") amounts may be misleading, particularly if used in isolation. A BOE conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel. This conversion ratio of six thousand cubic feet of natural gas to one barrel is based on an energy equivalent conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Artek is a crude oil and natural gas exploration, development and production company headquartered in Calgary, Alberta, Canada. Artek's shares trade on the Toronto Stock Exchange under the symbol "RTK".

The Toronto Stock Exchange has neither approved nor disapproved of the information contained herein.

Contact Information

  • Artek Exploration Ltd.
    Darryl Metcalfe
    President and Chief Executive Officer
    (403) 296-4799

    Artek Exploration Ltd.
    Darcy Anderson
    Vice President Finance and Chief Financial Officer
    (403) 296-4775
    www.artekexploration.com