Culane Energy Corp.
TSX VENTURE : CLN

Culane Energy Corp.

May 21, 2010 09:00 ET

Culane Provides Operational Update

CALGARY, ALBERTA--(Marketwire - May 21, 2010) -

THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR TO U.S. PERSONS.

Culane Energy Corp. ("Culane") (TSX VENTURE:CLN) is pleased to provide an operational update:

As was previously announced, pressure work carried out on Culane's Notukeu Upper Shaunavon well indicated that the well was not in direct pressure communication with the main reservoir. Culane has established a pre-stimulation production capability for this well. On April 19, 2010 Culane began completion operations on its Notukeu well HZ 1D1-1C2-6-11-17W3M. After two days of swabbing operations the well was swabbing at rates of 310 BOPD with a 92% oil cut. The well was placed back on production but stabilized oil production rates were not established. Culane has now shut-in the Notukeu well while it conducts an additional pressure evaluation.

The Notukeu horizontal well location is scheduled for additional completion operations on the 25th of May. At this time Culane is making preparations to perform a 10 stage sand frac utilizing Packers Plus technology. This is the same completion technique used successfully in the area on Lower Shaunavon Formation wells. The use of this completion technique on Lower Shaunavon has shown a 10 fold increase in stabilized initial oil production rates from 10 barrels of oil per day (pre-frac) to 125 barrels of oil per day after the sand frac operation. An example of this is horizontal well Clintonville 5A1-7-3A1-6-9-19 W3M. This completion technique has proved effective on low permeability reservoirs such as the Bakken in S.E. Saskatchewan, Lower Shaunavon and recently on the Upper Shaunavon Formations both in S.W. Saskatchewan.

Culane has a drilling inventory of up to 45 additional horizontal wells pending the results of the completion on this well. Gravity of the oil is 22.4 Degrees API. Culane will pay a 2.5% Royalty on the first 38,000 barrels (6000 m3) of oil produced from horizontal wells drilled in the Upper Shaunavon Formation on Saskatchewan Crown lands. Culane owns a 100% working interest in 13 sections (8300 acres) of land on this play and is the operator. Culane is currently licensing additional locations and is expected to commence the second phase of drilling operations in the third quarter of 2010 pending the results of the completion operation.

About Culane Energy Corp.

Culane Energy is a junior oil and gas company engaged in the exploration, development and production of oil and natural gas in Alberta.

Reader Advisories

Forward-Looking Statements: This news release contains certain forward-looking statements, including management's assessment of future plans and operations and the expected timing and results from operations, that involve substantial known and unknown risks, uncertainties and assumptions, certain of which are beyond Culane's control. Such risks, uncertainties and assumptions include, without limitation, those associated with oil and gas exploration, development, exploitation, production, marketing, processing 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, the impact of general economic conditions in Canada, the United States and overseas, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. Culane's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances 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 Culane will derive there from. Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on these and other factors that could affect Culane's operations and financial results are included in reports, including Culane's annual information form for the financial year ended December 31, 2009, on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). All subsequent forward-looking statements, whether written or oral, attributable to Culane or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and Culane 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.

24,519,754 Common Shares

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

Contact Information

  • Culane Energy Corp.
    Donald D. Staus
    President and Chief Executive Officer
    (403) 263-2773
    (403) 263-2776 (FAX)
    dstaus@culaneenergycorp.com
    or
    Culane Energy Corp.
    Stewart Larsen
    Vice President of Finance and Chief Financial Officer
    (403) 263-2773
    (403) 263-2776 (FAX)
    slarsen@culaneenergycorp.com
    or
    Culane Energy Corp.
    Thomas H. Field
    Vice President, Engineering and Operations
    (403) 263-2773
    (403) 263-2776 (FAX)
    tfield@culaneenergycorp.com
    or
    Culane Energy Corp.
    420, 333 - 5th Avenue S.W.
    Calgary, Alberta T2P 3B6
    www.culaneenergycorp.com