DeeThree Exploration Ltd.
TSX : DTX

DeeThree Exploration Ltd.

June 27, 2011 08:47 ET

DeeThree Accelerates Bakken Exploration With Joint Venture Agreement on Its Northern Lethbridge Lands

CALGARY, ALBERTA--(Marketwire - June 27, 2011) -

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DEETHREE EXPLORATION LTD. ("DeeThree") (TSX:DTX) is pleased to announce that it has entered into a farmout and joint venture agreement with a Calgary-based Junior oil and gas company (the "Farmee"), pursuant to which the Farmee has agreed to pay DeeThree $5,000,000 within seven days and committed to drill and complete, at its sole cost, risk and expense, two horizontal wells (the "Test Wells") evaluating the Mississippian and/or upper Devonian formations on 58 sections of land located in the northern portion of DeeThree's Lethbridge property approximately 40 miles north of DeeThree's recent drilling activity. The Farmee is responsible for 100% of the costs of the Test Wells through completion to earn a 60% working interest in seven sections of farmout lands (with no payout terms) for each well drilled. The Test Wells are to be drilled and completed prior to December 31, 2011.

After fulfilling the two Test Well obligation, the Farmee has the continuing right to elect to drill additional wells ("Option Wells") on similar terms and conditions until it has either elected to not drill an Option Well or has earned an interest in the balance of the 58 sections of lands. A full earning scenario would result in eight horizontal wells drilled on these lands at no cost to DeeThree.

DeeThree has now obtained commitments from third parties to drill a minimum of six horizontal wells on its Lethbridge property by December 31, 2011, expediting the exploration of DeeThree's Alberta Bakken land base. DeeThree's entire Alberta Bakken land base is anticipated to be tested by year end as a result of its ongoing drilling program and the drilling programs to be conducted by its joint venture partners.

DeeThree continues to maintain a large block of 100% working interest undeveloped land in the Lethbridge area in which it has identified and mapped geologically distinct features that it believes to be prospective for Bakken-sourced light oil.

Drilling Activity

DeeThree has a busy drilling schedule plannedfor the second half of 2011. In addition to the three Bakken wells drilled to date, DeeThree plans to drill twelve more horizontal wells on its properties prior to year end. DeeThree is currently drilling a Sunburst oil well on its Lethbridge property before continuing with its Bakken drilling program. Additionally, the drilling of the first well of the four horizontal well program to be conducted by DeeThree's joint venture partner (previously announced on April 18th, 2011) will commence shortly.

DeeThree continues to production test its second Bakken well with encouraging results to date. The results of this production test will influence the completion technique to be used on the third Bakken well and, as a result, this well will be fracture stimulated in the third quarter.

DeeThree will commence a development drilling program in the coming days on its recently acquired properties located in central and northern Alberta. This program is focused on potentially high impact development locations and provides for the drilling of five horizontal oil wells into the Belly River formation and the drilling of two oil wells into the Montney formation. DeeThree has identified in excess of 100 development drilling locations on these properties.

The second half of 2011 will be a very busy and exciting time for DeeThree as it drills these high impact prospects.This exploration and development program will be funded through a combination of current working capital and increased cash flow from operations. DeeThree believes it is in a strong position having a full suite of oil projects which position it for material production, reserve and value growth.

Reader Advisory

Forward-Looking Statements. Certain statements contained herein constitute forward-looking statements, including statements concerning the drilling and completion of wells on DeeThree's properties. DeeThree believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. The drilling and completion of these wells could be delayed if necessary approvals cannot be obtained within anticipated timelines. The forward-looking statements included in this press release are made as of the date of this press release and DeeThree disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities legislation.

We seek Safe Harbor.

Contact Information

  • DeeThree Exploration Ltd.
    Martin Cheyne
    President and Chief Executive Officer
    (403) 263-9130