Hyperion Exploration Corp.

Hyperion Exploration Corp.

January 11, 2011 08:08 ET

Hyperion Exploration Corp. Provides Operations Update

CALGARY, ALBERTA--(Marketwire - Jan. 11, 2011) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) is pleased to announce that it now has two Cardium horizontal light oil wells on production with a third well drilling and a fourth well to be drilled in the first quarter of 2011. Based on positive early results, Hyperion is accelerating its Cardium horizontal well drilling plans in North Pembina and is also initiating a three well, Charlie lake light oil drilling program in Paradise, British Columbia. All production numbers referenced in this press release are expressed as gross numbers.

North Pembina Cardium Light Oil

In October 2010, Hyperion acquired its Pembina – Niton asset, which is characterized by repeatable Cardium light oil and Wilrich liquids rich gas drilling opportunity. The following is a summary of the Company's activity to date and its near term future plans:

Pembina Cardium Hz Well Number 1 (1-18; 21% working interest)

Hyperion's first Cardium horizontal light oil producer went on stream in May 2010, flowing at a rate of 180 bbls/d of light oil and 50 mcf/d of gas (188 boe/d). Optimization efforts resulted in flowing production increasing to 400 bbls/d of light oil and 400 mcf/d of gas (467 boe/d) after 90 days. In August 2010, the third party gas gathering system that this well flowed into experienced a failure resulting in the gas flaring restriction of 1-18 production to approximately 100 bbls/d light oil and 70 mcf/d of gas (112 boe/d). Hyperion and its partner agreed to install a new gathering system that will accommodate existing gas and solution gas volumes from future drilling activity. This gathering system is approved for installation and is expected to be operational in January 2011.

Pembina Cardium Hz Well Number 2 (1-17; 43% working interest)

Hyperion's second Cardium horizontal well was drilled in September 2010 and multi stage fracture stimulated in November 2010. Hyperion and its operating partner in the Pembina area continues to refine its drilling and completion techniques. Whereas the first well, 1-18, was drilled with intermediate casing and fracture stimulated with frac oil, the 1-17 well was drilled monobore and fracture stimulated using slick water. Hyperion expects the adoption of these and other new technologies will improve productivity and lower costs in future operations.

Based on information provided by Hyperion's partner, the 1-17 well was flowed on cleanup from November 4 to November 6, 2010 at a final rate of 1,185 bbls/d of light oil and 714 mcf/d of gas (1,304 boe/d) and then placed on production on December 7, 2010, and is flowing at a restricted, gas flared flow rate. Over the past 30 days the well has averaged 214 bbls/d of light oil and 51 mcf/d of gas (223 boe/d) at a consistent surface flowing pressure of approximately 1600 kPa. The 1-17 well is expected to be tied into the new 1-18 gas gathering system in late January 2011, eliminating the current flaring and associated production restriction and optimized similar to the 1-18 well.

Pembina Cardium Hz Well Number 3 (16-9, 40% working interest)

Based on the very encouraging drilling results from Hyperion's first two wells, Hyperion and its operating partner are accelerating its plans in the North Pembina area. On December 31, 2010, Hyperion spud its third Cardium horizontal light oil well in the area.

Pembina Cardium Hz Well Number 4 (9-9, 40% working interest)

Hyperion and its operating partner plan to drill a fourth Cardium horizontal light oil well, 9-9, back to back with its third well, 16-9, and from the same drilling location. Not only will this save costs, but accelerates Hyperion's activity in the area.

Paradise, British Columbia Charlie Lake Oil – Three Well Drilling Program

In July 2010, Hyperion acquired its Paradise asset in Northeast British Columbia, which is characterized by multiple, repeatable, light oil drilling prospects, including the Montney and Charlie Lake. Hyperion is pleased to announce that it has now received Crown approval to drill its preliminary three well Charlie Lake drilling program starting in January 2011. Success in this first phase of drilling will lead to a more aggressive second half drilling program and ultimately a multi-year development drilling inventory in the area.

Hyperion is a publically traded, high growth junior oil and gas company resulting from the recapitalization of Triple 8 Energy Ltd. in July 2010. Hyperion's business strategy is to grow through acquisitions which lead to lower risk, scalable and repeatable development drilling projects. Currently Hyperion has 56 net drilling locations identified (50 oil, 6 natural gas), including 33 Cardium horizontal light oil prospects. The common shares of the Company trade on the TSX Venture Exchange under the trading symbol "HYX".

This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgements with respect to the future including, but not limited to, the outlook for commodity markets and capital markets, the performance of producing wells and reservoirs, well development and operating performance, general economic and business conditions, weather, the regulatory and legal environment and other risks associated with oil and gas operations. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted.

In the interest of providing Hyperion shareholders and potential investors with information regarding the Company, including management's assessment of Hyperion's future plans and operation, certain statements throughout this press release constitute forward looking statements. All forward-looking statements are based on the Company's beliefs and assumptions based on information available at the time the assumption was made. The use of any of the words "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward looking statements. By its nature, such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward looking statements. Hyperion 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 contained throughout this press release should not be unduly relied upon. These statements speak only as of the date specified in the statements.

In particular, this press release may contain forward looking statements pertaining to the following:

  • the performance characteristics of the Company's oil and natural gas properties;
  • oil and natural gas production levels;
  • capital expenditure programs;
  • the quantity of the Company's oil and natural gas reserves and anticipated future cash flows from such reserves;
  • projections of commodity prices and costs;
  • supply and demand for oil and natural gas;
  • expectations regarding the ability to raise capital and to continually add to reserves through acquisitions and development; and
  • treatment under governmental regulatory regimes.

The material assumptions in making these forward-looking statements include certain assumptions disclosed in the Company's most recent management's discussion and analysis included in the material available on this press release.

The Company's actual results could differ materially from those anticipated in the forward looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:

  • volatility in market prices for oil and natural gas;
  • liabilities inherent in oil and natural gas operations;
  • uncertainties associated with estimating oil and natural gas reserves;
  • competition for, among other things, capital, acquisitions of reserves, undeveloped lands and skilled personnel;
  • incorrect assessments of the value of acquisitions and exploration and development programs;
  • geological, technical, drilling and processing problems;
  • fluctuations in foreign exchange or interest rates and stock market volatility;
  • failure to realize the anticipated benefits of acquisitions;
  • general business and market conditions; and
  • changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry.

These factors should not be construed as exhaustive. Unless required by law, Hyperion does not undertake any obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.

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

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