Lynden Energy Corp.
TSX VENTURE : LVL

Lynden Energy Corp.

February 07, 2011 19:05 ET

Lynden Energy Corp.: Permian Basin Activity Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 7, 2011) - Lynden Energy Corp. (TSX VENTURE:LVL) reports updates on its Wolfberry and Mitchell Ranch Projects, both located in the Permian Basin, West Texas.

Wolfberry Project

Three new Wolfberry Project wells have been recently tied into production, bringing the total gross number of Lynden Wolfberry wells to 8. All three new wells were drilled to their target depths in the Mississippian formation, and were completed in the 'typical' Wolfberry formations (Spraberry and Wolfcamp) as well as in the deeper Strawn, Atoka and Mississippian limestone and shale formations.

Two of the new wells are in the Lynden's West Martin prospect area located primarily in Martin County. One of the wells was drilled as an 80 acre offset to one of Lynden's existing Wolfberry wells. The well began to produce oil almost immediately after being tied-in and has averaged 79 barrels of oil and 136 mcf of gas per day over the thirty-two days since oil production began, and 76 barrels of oil and 218 mcf of gas per day over the past 48 hours. The second new well has averaged 49 barrels of oil and 71 mcf of gas per day over the thirteen days since oil production began, and 46 barrels of oil and 134 mcf of gas per day over the past 48 hours. Lynden funded 50% of the cost of the wells to earn a 43.75% working interest. Lynden has the option to earn a 43.75% interest in leases in the West Martin prospect area covering approximately 5,286 gross (4,899 net) acres.

The third new well is located in the Wind Farms prospect area in Glasscock County. The well is located within a 2,720 acre contiguous block of leases and is approximately 1 mile from Lynden's one other Wolfberry well on the block. This well also began to produce oil almost immediately after being tied-in and has averaged 90 barrels of oil and 215 mcf of gas per day over the twenty-two days since oil production began, and 113 barrels of oil and 263 mcf of gas per day over the past 48 hours. Lynden funded 50% of the cost of the well to earn a 43.75% working interest. Lynden has the option to earn a 43.75% interest in leases in the Wind Farms prospect area covering approximately 3,350 gross (2,373 net) acres.

All three new wells are currently producing un-assisted, however the wells will be put on pump once initial pressure levels begin to drop. The ultimate productive capability of the new wells is unknown due to their limited production history, however initial results from the wells are very encouraging.

Lynden expects to be drilling, on average, one new Wolfberry well per month in 2011. Seven new wells are scheduled to spud by the end of May.

Mitchell Ranch Project

The Mitchell Ranch Project, provides Lynden with the option to acquire a 50% working interest in 101,495 gross and net acres located in Coke, Mitchell, and Sterling counties of West Texas. All acreage is contained within a historical ranch that lies to the immediate west of the Jameson oil field and is approximately 10 miles south-east of the Iatan oil field. The Mitchell Ranch Project is focused on Permo-Pennsylvanian-aged detrital targets along the eastern shelf of the Permian Basin where there are numerous opportunities across several pay zones, all of which are shallower than 8,000 feet in drilling depth.

To date Lynden and its partner have drilled two wells on the Mitchell Ranch Project. The Spade 14 #1 is on the eastern side of the property, approximately 4 miles north-west of the Jameson field, and the Spade 17 #1, approximately 14 miles west of the Spade 14 #1.

A multi-stage fracture stimulation was completed on the Spade 17 #1 in mid-2010. Producing back fracture fluid, formation water and reducing the fluid level in the well initially proved difficult as current electrical capacity in the area necessitated the use of a gas pump jack. After considerable time, and several optimizations of the pump set up, the fluid level in the Spade 17 #1 has recently dropped significantly and the well has been consistently producing oil and gas at rates that exceed the economic threshold for wells of this depth (TD of approximately 7,800 feet). Interpretive work is underway to determine if the source of the oil and gas is from 1) a new localized single zone discovery, 2) from several contributing zones, or 3) from a combination of the two. A zone of considerable interest remains to be tested uphole, although it has not yet been determined if this zone will be tested in this well or in a new well to be drilled nearby.

Two separate phases of completions have been carried out on the Spade 14 #1. The first phase was carried out in late August and a second phase was carried out in mid‐November. Similar to the Spade 17 #1, producing back fracture fluid, formation water and reducing the fluid level in the well has initially proved difficult due to pump jack capacity. Limited quantities of oil and gas have been observed to date in the Spade 14 #1 and accordingly a decision has been made to return into the hole and test a zone at the bottom of the hole that is productive in nearby wells. This work is expected to be undertaken in approximately two weeks.

Lynden is a Canadian-based oil and gas company with operations focused on our Wolfberry and Mitchell Ranch projects in the Permian Basin, West Texas, and our Paradox Basin Project, Utah.

ON BEHALF OF THE BOARD OF DIRECTORS

LYNDEN ENERGY CORP.

"Colin Watt"

President and CEO

FORWARD-LOOKING STATEMENTS DISCLAIMER: This news release contains forward-looking statements. The reader is cautioned that assumptions used in the preparation of such statements, although considered accurate at the time of preparation, may prove incorrect, and the actual results may vary materially from the statements made herein. Expectations of drilling, on average, one new Wolfberry well per month in 2011, spudding seven new wells by the end of May, and expected timelines relating to oil and gas operations are subject to the customary risks of the oil and gas industry. For a more detailed description of these risks, and others, see www.lyndenenergy.com/riskfactors.html.

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 news release.

Contact Information

  • Lynden Energy Corp.
    Colin Watt
    President and CEO
    (604) 629-2991
    (604) 602-9311 (FAX)
    www.lyndenenergy.com