Drake Energy Ltd.

February 02, 2010 13:08 ET

Drake Winter Operations Increases Production

CALGARY, ALBERTA--(Marketwire - Feb. 2, 2010) - Drake Energy Ltd. (TSX VENTURE:DPE)

Operations Overview

With strong oil prices being forecast and with a strategy to balance its oil and natural gas production, Drake Energy Ltd. ("Drake" or "the Company") has focused on its oil prospects for the 2009/2010 winter program. Oil wells were drilled and/or re-entered at Enchant, Sousa, and Jenner. In addition, gas optimization programs were implemented at Sousa, Jenner, and Retlaw.

Retlaw Gas Optimization

The gas optimization program at Retlaw resulted in a 50% increase in production at the 12-32 well to 300 Mcfd. The area now produces 31 (net) barrels of oil equivalent per day (BOED) for Drake.

Jenner Oil and Gas Optimization

The optimization program at Jenner resulted in the re-activation of the 13-06 gas well. The details will be released in the following weeks. 

Sousa Gas Optimization

The optimization program at Sousa included the re-entry of a well at 12-21 and further optimization work at the 11-12 and 13-12 wells. Upon re-entry, the 12-21 well-bore was determined to be in very poor condition and the well was abandoned. The 11-12 and 13-12 wells appear to have positive increases in gas production and new production of NGLs but details will not be released until next week to allow for further testing and validation. 

Sousa Oil Program

The oil program at Sousa included the optimization of a producing well at 09-02 and the re-entry of a horizontal well at 01-24. Both programs are nearly completed and are in the testing stages. Details should follow next week. Both wells have follow up locations under consideration.

Enchant Oil Program

At Enchant the Company did a re-completion of an existing well at 06-02 and drilled a well at 05-25. Both programs are in progress with results expected in February. Both wells have follow up locations under consideration.

Current Production

"In the last half of 2009, Drake shut in production due to low natural gas prices," said Drake president, Mr. Neil Orr. "Production for the third quarter averaged only 129 BOED and remained curtailed throughout the remainder of the year. With the re-activation of the shut-in wells and the success of our winter program, we have an approximate current field level production of 250 BOED representing almost a 100% increase from third quarter production levels. 2009 was an exceptionally difficult year for the industry and for the Company. Determined to break out of the malaise, we ran an aggressive winter program which has produced positive results. Our oil program appears to be on track to produce one of our best wells yet."

Drake Energy Ltd. is active in oil and gas exploration and development in Alberta. Headquartered in Calgary, Alberta, Canada, the Company is publicly traded on the Toronto Stock Exchange Venture Board under the stock symbol DPE.V.

This news release contains forward-looking information. Implicit in this information are assumptions regarding commodity pricing, production, royalties and expenses that, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. These forward-looking statements are based on certain assumptions that involve a number of risks and uncertainties and are not guarantees of future performance. Actual results could differ materially as a result of changes in the Company's plans, commodity prices, equipment availability, general economic, market, regulatory and business conditions as well as production, development and operating performance and other risks associated with oil and gas operations. There is no guarantee made by the Company that the actual results achieved will be the same as those forecasted herein. Barrel of oil equivalent ("boe") amounts may be misleading, particularly if used in isolation. A boe conversion ratio has been calculated using a conversion rate of six thousand cubic feet of natural gas to one barrel and is based on an energy equivalent conversion method application at the burner tip and does not necessarily represent an economic value equivalent at the wellhead.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.

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