VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jan. 9, 2014) - East West Petroleum Corp. (TSX VENTURE:EW) (the "Company" or "East West"), is pleased to provide the following operational update on its activities in the Taranaki Basin of New Zealand. All of the wells are operated by joint venture partner TAG Oil Ltd. ("TAG").
Cheal E-site update (30% EW)
The Company has been informed by TAG the initial five well drilling program at the Cheal-E site on the Cheal North permit (PEP 54877) was successfully completed in mid-December. Cheal-E1 has been naturally flowing, 17/64" choke, for 44 days and has produced at an average of 547 boe/d (88% oil) while Cheal-E4 has been naturally flowing, 10/64" choke, for seven days and has produced an average of 315 boe/d (87% oil); both wells having produced in aggregate more than 23,100 barrels of oil to date (26,400 boe).
Following perforation, Cheal-E2 and Cheal-E3 tested oil naturally to surface and will require artificial lift to maximize production as expected. This work, in addition to the perforation and completion of Cheal-E5 will be initiated in the second half of January as equipment becomes available. As required work is completed, Cheal-E site wells will be tied in for permanent production at TAG's recently commissioned Cheal-E site separation facilities.
Pending completion of the outstanding activities at E-site and further analysis of all results, the joint venture estimates there is potential for 15 - 20 follow-up locations on the permits awarded in December 2012.
Under the joint venture agreement, the Company paid 100% of the first $5 million of initial drilling costs of the first two Cheal-E wells and is entitled to recover the first $5 million in revenue from Cheal-E Site sales while also paying 100% of the costs to produce that revenue. Subsequently all cash flow and operations will revert to 30% East West and 70% TAG. Payout is forecast to occur in less than two months at current production rates.
Cheal G-site update (50% EW)
With the conclusion of the Cheal E-Site drilling program, the Nova-1 rig was moved to the Cheal G-site where Cheal-G1 was spudded on January 3, 2014 kicking off a three well drilling program on the Cheal South permit (PEP 54879). The Company will fund the first $2.5 million in capital expenditure, and is entitled to receive the first $2.5 million in revenue sales while also paying 100% of the costs to produce that revenue, following which costs and interest in the wells will revert to 50% East West and 50% TAG.
About East West Petroleum Corp.
East West Petroleum (http://www.eastwestpetroleum.ca) is a TSX Venture Exchange listed company established in 2010 to invest in international oil & gas opportunities. East West has built a diverse platform of attractive exploration assets covering a gross area of approximately 1.8 million acres. In New Zealand, East West holds an interest in three exploration permits near to existing commercial production in the Taranaki Basin with a nine well drilling campaign, operated by TAG Oil Ltd. (TSX:TAO), is in progress. The Company also interests in four exploration concessions covering 1,000,000 acres in the prolific Pannonian Basin of western Romania with a subsidiary of Russia's GazpromNeft; a joint venture exploration program covering 8,000 gross acres in the San Joaquin Basin of California; an oil-prone exploration block of 100,000 acres in the Assam region of India with the three largest exploration and production Indian firms ONGC, Oil India and GAIL; and a 100% interest in a 500,000 acre exploration block onshore Morocco. The Company has now entered operational phases in Romania, where it will be fully carried by its partner Gazprom-controlled Naftna Industrija Srbije in a seismic and 12-well drilling program which is underway.
Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, but are not limited to: the ability to raise sufficient capital to fund exploration and development; the quantity of and future net revenues from the Company's reserves; oil and natural gas production levels; commodity prices, foreign currency exchange rates and interest rates; capital expenditure programs and other expenditures; supply and demand for oil and natural gas; schedules and timing of certain projects and the Company's strategy for growth; competitive conditions; the Company's future operating and financial results; and treatment under governmental and other regulatory regimes and tax, environmental and other laws.
Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Prospective Resources are further subdivided in accordance with the level of certainty associated with recoverable estimates assuming their discovery and development and may be subclassified based on project maturity. Best estimate resources are considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term is a measure of central tendency of the uncertainty distribution (most likely/mode, P50/median, or arithmetic average/mean). As estimates, there is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources that the estimated reserves or resources will be recovered or produced.
This list is not exhaustive of the factors that may affect our forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. The Company disclaims any intention or obligation to update or revise forward-looking information, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.