C1 Energy Ltd.

C1 Energy Ltd.


September 22, 2005 22:59 ET

C1 Energy and Arapahoe Energy Provide an Update of the Sarcee Well

CALGARY, ALBERTA--(CCNMatthews - Sept. 22, 2005) - C1 Energy Ltd. (TSX:CTT) ("C1") and its partner Arapahoe Energy Corporation (TSX VENTURE:AAO) ("Arapahoe") are providing this joint update with respect to the C1 et al Sarcee 12-13 23-4W5M exploration well.

C1 is pleased to announce that we have now completed drilling and a preliminary test of the well Sarcee 12-13-23-4W5M well. It was drilled to a depth of 3254m and intermediate casing was set to 3160m. Immediately below this depth, the well encountered a 70m gross (48 meter net) interval with five percent average porosity in the primary target being the Turner Valley formation which is fully dolomitized. The well has been pre-flowed in an open hole condition to verify the presence of natural gas and to determine if the well requires stimulation.

Based on this preliminary information provided by C1 as operator, Sproule Associates Limited have determined that a gas pool has been encountered, and estimate that the Original Gas In Place of this pool could be between 20 billion standard cubic feet to 30 billion standard cubic feet. At this time it appears no previous production has been established from this pool. Similar gas pools in the area are high deliverability, hydrocarbon liquids rich and demonstrate long reserve life indices.

This initial estimate is based on the well logs and the preliminary test information together with areal extent approximated from 3D seismic. Original Gas In Place is not a reserve classification. The determination of recoverable reserves will be done after other factors are determined from further tests and future production performance. Original Gas in Place is assigned to the pool, and may require more than one wellbore to effectively drain this pool.

The well requires selective acid stimulation and C1, as the operator, is in the process of procuring a service rig, equipment and services. This is standard completion procedure for similar wells in this area. This is to be followed by a full production test to determine the wells post-stimulation productive capability. Due to equipment and labor availability, it is anticipated that these operations may be delayed for two or three months.

In accordance with the farm-out agreement C1 funds 25% of the costs associated with the drilling and completion of the well and retains a 55% working interest while Arapahoe will earn a 45% working interest in the well and associated farm-out lands only after completing all of these operations. C1 is the operator of all aspects of the project.

C1 and Arapahoe currently jointly hold 4 sections (2560 acres) over this project area. Evaluation of 3D seismic over these lands has identified the structural feature verified by the current 12-13 discovery as well as two to three development locations on this structure. A second prospective structure has been identified on the lands that will be further evaluated for its exploratory potential.

C1 currently has a large inventory of drilling locations on an undeveloped land base of approximately 146,000 acres, net to C1. C1 has exclusive access to an additional 168,000 acres of undeveloped land bringing the company's total undeveloped land inventory to 314,000 acres. C1 currently has approximately 32.7 million common shares outstanding.

Arapahoe Energy Corporation ("AAO" - TSX Venture Exchange) is a junior oil and natural gas explorer with activities focused in central Alberta and the Alberta foothills. Arapahoe has approximately 30,000 gross acres of undeveloped lands and currently has approximately 22.8 million shares issued and outstanding.

Disclosure provided herein in respect of barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Certain information set forth in this press release contains forward-looking statements. All statements other than historical fact contained herein are forward-looking statements, including, without limitation, statements regarding the future financial position, business strategy, production rates and plans and objectives of or involving C1 Energy Ltd. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond C1's control, including the impact of general economic conditions, industry conditions, governmental regulation, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. C1's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that C1 will derive therefrom. C1 disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • C1 Energy Ltd
    Hugh Pattillo
    President & CEO
    (403) 232-1115 ext 107
    C1 Energy Ltd
    Ron Barmby
    VP & COO
    (403) 232-1115 ext 105
    C1 Energy Ltd
    500, 521-3rd Avenue S.W.
    Calgary, AB T2P 3T3 Canada
    (403) 232-1115
    (403) 232-1130 (FAX)
    Website: www.c1energy.ca
    Arapahoe Energy Corporation
    Jeffrey L. Standen
    President and C.E.O.
    (403) 920-0040
    Arapahoe Energy Corporation
    Brett J. Standen
    Corporate Communications
    (403) 920-0040
    (403) 920-0043 (FAX)
    Website: www.arapahoe-energy.com