Crocotta Energy Inc.

Crocotta Energy Inc.

January 17, 2011 06:00 ET

Crocotta Energy Provides 2011 Guidance and Provides Operational Update

CALGARY, ALBERTA--(Marketwire - Jan. 17, 2011) - Crocotta Energy Inc. ("Crocotta" or the "Company") (TSX:CTA) is pleased to announce 2011 Guidance and further drilling success at its two key growth projects (liquids-rich Bluesky gas at Edson, Alberta and Montney / Doig gas in Northeast British Columbia).


Crocotta has approved a budget that entails spending approximately $51 million in 2011 with 75% focused on liquids-rich natural gas at Edson. Of the remaining capital, approximately 16% will be spent pursuing "New Oil Projects" with the remaining balance spent on the Montney at Dawson.

Crocotta estimates average 2011 production to be 1,235 bopd of light oil and natural gas liquids plus 13.0 mmcf/d of natural gas for a total of 3,400 boepd. 2011 exit production is estimated to reach 1,700 bopd of light oil and natural gas liquids plus 16.8 mmcf/d for a total of 4,500 boepd. Production from light oil and natural gas liquids is projected to more than double from current production of 835 bopd while natural gas would increase 68% from current production of 10.0 mmcf/d. Liquid production on a percentage basis climbs from 33% currently to 38% by the end of 2011. By allocating capital to New Oil Projects in 2011, Crocotta estimates it can achieve close to 50/50 liquids/ gas split during 2012.


During Q410, Crocotta drilled three new hztl Bluesky wells at Edson (1 oil well and 2 liquids-rich gas wells) and one vertical Montney gas test at Sunrise (Northeast British Columbia).


The Bluesky oil well (35% WI) has been on production since December 1, 2010 and is currently producing over 200 bopd (gross basis) of light sweet oil. Crocotta is in the process of optimizing the well and expects the flow rate to increase over the next few weeks. The on-stream cost of the oil well was approximately $4.2 million (gross basis).

One of the Bluesky gas wells (20% WI) has been on production since November 27, 2010 and is currently producing 280 bopd (gross basis) of combined light oil and natural gas liquids in addition to 2.5 mmcf/d (gross basis) of sales gas for a total of 700 boepd (gross basis). The on-stream cost of the Bluesky gas wells is approximately $5.0 million (gross basis).

The second Bluesky gas well (29% WI) was completed in early January 2011 and has been on-stream since January 8, 2011. Information on this well will be released once stable production rates have been achieved.

Crocotta is currently drilling higher interest sections at Edson.

Dawson / Sunrise

At Sunrise, Crocotta drilled a vertical Montney well and tested gas out of three separate Montney sands. The Upper Montney sand tested at a rate of 700 mcf/d of sweet gas at the end of a 4 day flow period. The zone of interest was also tested vertically to the north by a competitor at similar rates with their offset horizontals producing at rates of 6-10 mmcf/d. Horizontal development of this project will be slated for 2012.


Crocotta is well positioned to show accelerated and material growth through the exploitation of its large proven resource base at Edson and in the Montney.

Forward-Looking 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", "may", "will", "should", "believe", "intends", "forecast", "plans", "guidance" and similar expressions are intended to identify forward-looking statements or information.

More particularly and without limitation, this document contains forward looking statements and information relating to the Company's oil, NGLs and natural gas production and capital programs. The forward-looking statements and information are based on certain key expectations and assumptions made by the Company, including expectations and assumptions relating to prevailing commodity prices and exchange rates, applicable royalty rates and tax laws, future well production rates, the performance of existing wells, the success of drilling new wells, the availability of capital to undertake planned activities and the availability and cost of labour and services.

Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, it can give no assurance that such expectations 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 may differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the risks associated with the oil and gas industry in general such as operational risks in development, exploration and production, delays or changes in plans with respect to exploration or development projects or capital expenditures, the uncertainty of estimates and projections relating to production rates, costs and expenses, commodity price and exchange rate fluctuations, marketing and transportation, environmental risks, competition, the ability to access sufficient capital from internal and external sources and changes in tax, royalty and environmental legislation. The forward-looking statements and information contained in this document are made as of the date hereof for the purpose of providing the readers with the Company's expectations for the coming year. The forward-looking statements and information may not be appropriate for other purposes. The Company undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.

BOE Conversions

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.

Contact Information

  • Crocotta Energy Inc.
    Robert Zakresky
    President and Chief Executive Officer
    (403) 538-3736
    Crocotta Energy Inc.
    Nolan Chicoine
    Vice President, Finance and Chief Financial Officer
    (403) 538-3738
    Crocotta Energy Inc.
    700, 639 - 5th Ave SW
    Calgary, Alberta T2P 0M9
    (403) 538-3737
    (403) 538-3735 (FAX)