NuLoch Resources Inc.

NuLoch Resources Inc.

January 16, 2006 07:15 ET

NuLoch Provides Operational Update

CALGARY, ALBERTA--(CCNMatthews - Jan. 16, 2006) -

NuLoch Resources Inc. (TSX VENTURE:NLR.A) (TSX VENTURE:NLR.B) is pleased to provide the following operational update.

Farm-in Opportunities

In December 2005 NuLoch agreed to farm-in on three exploration prospects with a large Canadian energy trust. This is consistent with our business plan of expanding exploration around our core development area in an efficient and cost-effective manner.

NuLoch will drill and case three wells at its own expense on these three new prospects with options to drill additional wells. The farmor has the right to participate in the completion and equipping of these wells at working interests ranging from 33 1/3% to 40%. These three opportunities are located in southern Alberta at Little Bow, Enchant and Retlaw.

At Little Bow, the Company has committed to drill a test well targeting natural gas in a lithic Mannville channel. If successful, there is potential for two follow-up locations on a rolling option basis.

At Enchant, two sections of land have been secured with one well proposed to target natural gas in a lithic Mannville channel with a possible follow-up location.

At Retlaw, a test well will be drilled to evaluate the Upper Mannville formation for natural gas on one section of land. If oil is encountered, additional locations may be proposed.

Each well to be drilled on these prospects has the potential to add production at initial gross rates of 500 mcf/d to 1,000 mcf/d. Drilling operations are scheduled to commence late in the first quarter, subject to rig availability.

Enchant Shallow Gas

NuLoch's shallow gas project at Enchant Alberta is proceeding on schedule. The drilling phase was finished on December 20, 2005 with rig release of the 42nd well in the program. One rig was used to drill 36 of the wells over a period of 75 days for an average of 2.1 days per well. NuLoch's average working interest is over 99%.

Completion operations over the Second White Specks ("SWS") Formation commenced in early November with the first pad of three wells placed on production ahead of schedule on December 5, 2005. By the end of December, a total of nine wells had been tied-in. Completion and tie-in operations will continue throughout January and wells will be placed on-stream one-at-a-time during Q1. This staggered approach will maintain gathering system balance and minimize plant upsets. Three wells were unsuccessful and will not be produced from the SWS. We expect 39 wells to be on production by the end of March.

We must caution that we are in the start-up phase and reliable production information is still being gathered. However, to date, we are satisfied that average flush production rates for natural gas are as expected. As indicated in our news release of November 17, 2005, NuLoch expects to attain a production level of 500 boe/d before the end of the first quarter.

We plan to drill 18 additional SWS development wells on this property in 2006, complimented with the new low to medium risk exploration prospects in hand, and continue to add to both exploration and development opportunities for 2006 and beyond.

Forward-looking Information

The corporate information contained in these pages contains forward-looking information. The reader is cautioned that assumptions used in the preparation of such information, although considered reasonable by NuLoch at the time of preparation, may prove to be incorrect. The actual results achieved in future periods will vary from the information provided herein and the variations may be material. Consequently, there is no representation by NuLoch that actual results achieved during future periods will be the same in whole or in part as the information contained herein.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • NuLoch Resources Inc.
    James N. McIndoe
    President and CEO
    (403) 920-0455
    (403) 920-0457 (FAX)
    NuLoch Resources Inc.
    2200, 444 - 5th Avenue SW
    Calgary, Alberta T2P 2T8