Atikwa Resources Inc.

Atikwa Resources Inc.

August 29, 2011 07:00 ET

Atikwa Resources Inc. Announces Operations Update for Porcupine Hills

CALGARY, ALBERTA--(Marketwire - Aug. 29, 2011) - Atikwa Resources Inc. ("Atikwa" or the "Company") (TSX VENTURE:ATK)is excited to announce that it has resumed operations for the drilling of a horizontal well at its liquids rich Porcupine Hills discovery in Alberta. The Company has begun the lease preparation in anticipation of the drilling rig being moved in during the first week of September with drilling scheduled to begin in the Second week of September. The drilling operation is anticipated to take about seven days to complete.

Last fall the Company completed the successful re-entry, flow-testing, and pressure build up analysis of the well. During the flow-test in October of last year, the well produced at varying rates, with initial rates of 4.0 to 9.0 million cubic feet per day with associated liquids of 30 barrels per million cubic feet of gas, which translates into approximately 600 to 1500 boepd with 125 to 270 barrels of that being natural gas liquids. Natural gas liquids are attractive because they are commonly priced in relation to crude oil prices. During the flow-test initial production rates decreased as a result of down-hole near wellbore blockage. A more detailed analysis of the pressure data and down hole sampling suggests that the well has higher than expected near wellbore formation damage associated with the original 1981 drilling fluids reacting with the natural clays inherent in the reservoir.

To address this issue, the Company has now commenced a program to drill horizontally out of the existing wellbore, with compatible fluids, in order to get out past the formation damage and into virgin reservoir. The existing wellbore has 9-5/8" casing, which will allow up to two horizontal laterals to be drilled from the existing surface location. Such an operation will save significantly on drilling costs and set up a strategic drilling Island to begin the development of this exciting New Field Wildcat Discovery. President Sean Kehoe stated; "Our rock work and test data shows that this reservoir is hydrocarbon charged with good pressure, conventional porosity and permeability. The reservoir is a matrix supported coarse grain sand and pebble conglomerate. With this type of shoreline deposition, by drilling a horizontal across the property, there is always the chance of intersecting with even higher permeability pebble supported conglomerates."

Preliminary modeling of a horizontal well, based on reservoir parameters seen in the re-entered well, suggests an initial potential production rate of 4.0 to 11 mmcf/day for an open-hole horizontal well. The pressure data did not show any formation boundaries in the region that was investigated, by the test, which suggests that this formation could have significant lateral extent. The Company has recently expanded its interest in this play and now holds a 100% working interest in the well and seven contiguous sections of land in the area. The well will qualify for the "Alberta New Well Royalty Rate", which provides a maximum 5% Crown royalty rate during the first full year of production.

This news release contains forward-looking statements relating to the Company's plans and other aspects of the Company's anticipated future operations, strategies, financial and operating results and business opportunities. Forward-looking statements typically use words such as "anticipate", "believe", "project", "expect", "plan", "intent" or similar words suggesting future outcomes, statements that actions, events or conditions "may", "would", "could" or "will" be taken or occur in the future, or consists of statements regarding estimates of future production, operating costs or other expectations, beliefs, plans, objectives, assumptions or statements about future events or performance. Statements regarding reserves and resources are also forward-looking statements, as they reflect estimates as to the expectation that the deposits can be economically exploited in the future. Although the Company believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not unduly rely on forward-looking statements. The forward-looking statements contained in this news release are made as 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. The term barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf: 1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The Company's Porcupine Hills property is currently classified as a contingent resource. Contingent resources are those quantities of oil and gas estimated on a given date to be potentially recoverable from known accumulations but are not currently economic. Additional drilling, testing and development are required to confirm economic recovery of the resource is possible and to attribute reserves to the Porcupine Hills property.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Atikwa Resources Inc.
    Sean Kehoe
    President and CEO
    (403) 233-6073