Nexstar Energy Ltd.

Nexstar Energy Ltd.

November 05, 2009 18:14 ET

Nexstar Energy Provides Operations Update

CALGARY, ALBERTA--(Marketwire - Nov. 5, 2009) - Nexstar Energy Ltd. ("Nexstar Energy" or the "Company") (TSX VENTURE:NXE.A) (TSX VENTURE:NXE.B) announces significant progress on its Cardium light oil exploration and development program in the Pembina area of west central Alberta. To date, the Company has participated in the drilling of five horizontal wells of which three wells are currently on production, the fourth well has been production tested with favourable results and the fifth well has been drilled to target depth.

In November, the Company expects to tie-in the fourth well for production, complete and test the fifth well and participate in the drilling of two additional horizontal wells including the drilling of a development well at East Pembina and spudding of the Company's first well on its West Pembina block. The Company will be participating for a 31.82% working interest and a 25% working interest, respectively, in these new wells. The Company also plans to participate in the drilling and completion of up to three additional horizontal wells in the Pembina area in December, 2009, subject to surface access.

The Company also reports that the first two wells completed in the Pembina program are currently producing light oil at a combined gross rate of approximately 220 bbls/d with 15 boepd of solution gas and no water. The third well, a step-out well at East Pembina, has recovered all 4,660 barrels of frac oil and is now producing new oil at a gross rate of approximately 35 bbls/d with 5 boepd of solution gas and no water. The first two wells are producing as anticipated while the third well is producing below initial expectations, which the Company believes results from mechanical or reservoir issues. Remedial activities are being reviewed for this well. At present, the Company's net production from the three wells is approximately 90 boepd.

The fourth well in the program flowed and recovered all 4,370 barrels of frac oil and an additional 2,463 barrels of new oil during a 220 hour test period. This well is presently shut-in for pressure buildup and is scheduled to be tied-in and producing later this month. The Company has increased its working interest in this well to 31.82% from 20.68% by assuming an increased share of the well costs and reserving a gross-overriding royalty to a third party farmor. The fifth well in the program, in which the Company has a 31.82% working interest, was successfully drilled with a 1,234 metre lateral section and will be fracture-stimulated and production tested later in November and is expected to be on production in early December.

The Company also reports that it has increased its land holdings in the Pembina area and now controls approximately 10,720 gross acres (3,969 net acres) of undeveloped Cardium lands and continues to hold a significant inventory of Cardium light oil drilling locations with working interests varying between 20% and 100%.

The Company advises that a further 2,700,000 Class A Shares have recently been issued as a result of the exercise of warrants and the number of issued and outstanding Class A Shares of the Company has been increased to 97,611,169. The Company also advises that there are currently 13,200,000 outstanding warrants exercisable into flow-through Class A Shares of the Company, which expire at 4:30 p.m. (Calgary time) on November 23, 2009.

About Nexstar Energy

Nexstar Energy is an emerging junior oil and gas company focused on the drilling and development of its Cardium light oil prospects in the Pembina area of west central Alberta.

For further information, please go to Nexstar Energy's website.

Reader Advisory

This news release may contain certain forward-looking statements, which include assumptions with respect to (i) production; (ii) future capital expenditures; (iii) funds from operations; (iv) cash flow; and (v) debt levels. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward-looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond the Company's control. Such risks and uncertainties include, without limitation, risks associated with oil and natural gas exploration, development, exploitation, production, marketing and transportation, loss of markets, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, competition from other producers, inability to retain drilling rigs and other services, delays resulting from or inability to obtain required regulatory approvals and ability to access sufficient capital from internal and external sources, the impact of general economic conditions in Canada and the United States, industry conditions, changes in laws and regulations (including the adoption of new environmental laws and regulations) and changes in how they are interpreted and enforced, increased competition, the lack of availability of qualified personnel or management, fluctuations in foreign exchange or interest rates, stock market volatility and market valuations of companies with respect to announced transactions and the final valuations thereof, and obtaining required approvals of regulatory authorities. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do, what benefits, including the amount of proceeds, the Company will derive therefrom. Readers are cautioned that the foregoing list of factors is not exhaustive. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release and the Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

Boes may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

97,611,169 Class A Shares

1,080,000 Class B Shares

Neither 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.

Contact Information

  • Nexstar Energy Ltd.
    Peter A. Carwardine
    President and CEO
    (403) 263-6133 ext. 201
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    Brian J. Spilchen
    VP Finance and CFO
    (403) 263-6133 ext. 202
    (403) 263-3629 (FAX)
    Nexstar Energy Ltd.
    603 - 7 Avenue SW, Suite 525
    Calgary, Alberta T2P 2T5