Celtic Exploration Ltd.

Celtic Exploration Ltd.

March 16, 2011 12:18 ET

Celtic Announces Gas Plant Outage at Kaybob

CALGARY, ALBERTA--(Marketwire - March 16, 2011) - Celtic Exploration Ltd. ("Celtic" or the "Company") (TSX:CLT) has been informed by SemCAMS (the operator of the K3 Gas Plant and gathering system) that a mechanical failure has occurred at the K3 Gas Plant. The K3 Gas Plant has been shut down and is expected to re-start after repairs are completed on or around March 22, 2011.

The Company does not expect the shut down of the K3 Gas Plant to materially affect Celtic's production as the Company has been able to divert a portion of its gas production to the nearby KA Gas Plant. Celtic has an ownership position in both the KA and K3 Gas Plants.

Celtic's production from Kaybob that is processed at the K3 Gas Plant and which has not been diverted to the KA Gas Plant is approximately 2,500 BOE per day. Production from one of Celtic's Bluesky pools at Kaybob will not be diverted to the KA Gas Plant and will remain shut-in for cost efficiency purposes. However, the wells from this pool have high enough bottom-hole pressure and the Company could gain some of the shut-in production back through high rate flush production during the first week after the wells return on stream.

If the Company's shut-in production remains off line until March 22, 2011 and if the Company does not benefit from flush production for wells that are shut-in, the exposure for the first quarter of 2011 average volume is approximately 335 BOE per day and for the calendar year 2011, average volume would be affected by approximately 85 BOE per day.

The Energy Resources Conservation Board has granted Celtic approval to construct a gas processing facility capable of handling 150 MMCF per day of raw gas. This facility would be located at 15-07-60-18W5 which is centered between the KA and K3 Gas Plants. Celtic is actively drilling wells at Kaybob targeting the Duvernay shale formation. With success in the Duvernay, Celtic could be in a position to construct an operated gas plant in the area in 2012. 

Advisory Regarding Forward-Looking Statements

Certain information with respect to Celtic contained herein, including management's assessment of future plans and operations, expected timing of re-start of K3 Gas Plant, effect of shut-in of production and timing of possible construction of new plant contains forward-looking statements. These forward-looking statements are based on assumptions and are subject to numerous risks and uncertainties, certain of which are beyond Celtic's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency exchange rate fluctuations, imprecision of reserve estimates, environmental risks, competition from other explorers, stock market volatility and ability to access sufficient capital. As a result, Celtic'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 events anticipated by the forward-looking statements will transpire or occur. In addition, the reader is cautioned that historical results are not necessarily indicative of future performance. The forward-looking statements contained herein are made as of the date hereof and the Company does not intend, and does not assume any obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise unless expressly required by applicable securities laws.

Other Measurements

All dollar amounts are referenced in Canadian dollars, except when noted otherwise. Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to oil equivalence at six thousand cubic feet per barrel and sulphur volumes have been converted to oil equivalence at 0.6 long tons per barrel. The term BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References to oil in this discussion include crude oil and natural gas liquids ("NGLs"). NGLs include condensate, propane, butane and ethane. References to gas in this discussion include natural gas and sulphur.

Contact Information

  • Celtic Exploration Ltd.
    David J. Wilson
    President and Chief Executive Officer
    (403) 201-5340
    Celtic Exploration Ltd.
    Sadiq H. Lalani
    Vice President, Finance and Chief Financial Officer
    (403) 215-5310
    Celtic Exploration Ltd.
    Suite 500, 505 - 3rd Street SW
    Calgary, Alberta
    Canada T2P 3E6