Hanwei Energy Services Corp.
TSX : HE

Hanwei Energy Services Corp.

October 20, 2014 08:00 ET

Hanwei Energy Services Announces Workover Update From Its Oil and Gas Operations

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Oct. 20, 2014) - Hanwei Energy Services Corp. (TSX:HE) ("Hanwei" or the "Company"), today announced its continued workover results from its operating oil and gas wells in its Leduc Lands.

The Company has conducted an eight stage, 20 tonne / stage hydraulic frac, over the 550 meter lateral of its existing 13-33-49-26W4 Nisku horizontal well, for a total cost of approximately $1,000,000. The workover was fully completed with the well on stream and producing as of August 29th, 2014 with the Company focused on stabilizing liquids production and extraction of frac fluids since that time. Of note:

  • During the month of September this well produced 2,334 barrels of oil from total produced liquids of 6,328 barrels (representing a 63% water cut) together with 8,820 mcf of gas.
  • Within the month of October and ending Saturday October 18th, 2014 the daily average oil production from this well is 70 bbl/d with average daily produced liquids of 200 bbl/d (representing a 65% water cut) with 276 mcfd of gas.
  • The Company previously announced its Reserves Report as of August 31, 2014 (the "Reserves Report") estimating total gross proved and probable oil and gas reserves (2P) of 1,198.1 Mboe. The Reserves Report includes only minimal initial production data from the 13-33 well up to the August 31, 2014 report date.

The Company considers the initial improved oil production from this 13-33 well into the Nisku formation a success. As such the Company is undertaking development planning for several new, multi-stage frac, horizontal Nisku wells. It should be noted that the horizontal sections of new wells being planned are anticipated to be at 1,200 to 1,400 meters in length versus the 13-33 well's shorter 550 meter horizontal. The Company expects that production from its new horizontal Nisku wells should be greater than the 13-33 results. The expected net pay depth in the Nisku zone for these new wells is approximately 10 to 12 meters deep.

The enhanced production results of the 13-33 workover compliments the previously announced success from the perforation of the Company's existing 14-32-49-26W4 Ellerslie formation gas well and which continues to produce at 1,000 mcfd. The Company's current, average total oil and gas production from its Leduc Lands is approximately 370 boed.

The Company has also conducted initial workover on its 15-19-49-26W4M and 10-29-49-26W4M wells to explore production potential into the higher Wabamun formation that sits above its Nisku zone. Initial findings are not yet conclusive and the Company plans to supplement its data with core samples to be obtained from the Wabamun zone during the drilling of its new Nisku horizontal wells.

Hanwei's oil and gas production business is focused on enhancing its Leduc Lands asset base and growing its cash flow from operations through development drilling within its core project area. The Company intends to generate production opportunities possessing low to medium risk from multi-zone potential.

About Hanwei Energy Services Corp.

Hanwei Energy Services Corp.'s principal business operations are in two complimentary key segments of the oil and gas industry as both an equipment supplier to the industry (as a leading manufacturer of high pressure, fiberglass reinforced plastic ("FRP") pipe products and associated technologies serving major energy customers in the global energy market) and as an operator of its producing oil and gas mineral rights at its 4,000 acre Leduc Lands in Alberta.

www.hanweienergy.com

Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.

FORWARD-LOOKING INFORMATION AND NON-GAAP MEASURES

Certain information in this press release is forward-looking within the meaning of certain securities laws, and is subject to important risks, uncertainties and assumptions a description of which is set out in the risk factors section of the Company's Annual Information Form dated June 20, 2014 and Management Discussion and Analysis for the year ended March 31, 2014 both of which are filed with Canadian securities regulators and available on SEDAR at www.sedar.com. The forward-looking information in this press release describes the Company's expectations as of the date of this press release.

THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME, EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION.

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