Blackbird Energy Inc.
TSX VENTURE : BBI

Blackbird Energy Inc.
Stage Completions Inc.

Stage Completions Inc.

November 29, 2016 03:00 ET

Stage Completions Inc. Announces Record 76 Stage Pin-Point Completion Without Coil Tubing Assist, Bowhead II System Roll-Out Achievement & Sale of a 10% Minority Interest to Blackbird Energy

CALGARY, ALBERTA--(Marketwired - Nov. 29, 2016) -

Editor's note: There are four images and one video associated wth this release.

Stage Completions Inc. ("Stage" or the "Company") is pleased to announce the successful deployment of its Bowhead II collet activated fracturing system (the "Stage System" or the "Bowhead Technology") in a record 76 stage pin-point Upper Montney completion without coil tubing assist, the successful roll-out of the Stage System in numerous major unconventional formations, and the closing of the sale of a 10% indirect minority interest in Stage to Blackbird Energy Inc. ("Blackbird") (TSX VENTURE:BBI).

Highlights

  • Record Setting Stage System Deployment: The Stage System was successfully deployed in Blackbird's 3,757 tonne, 76 stage Montney completion program. The completion saw frac pump rates as high as 10 m3/min (63 barrels per minute). This is believed to be the largest completion in the Montney without coil tubing assist.
  • Successful Rollout of the Bowhead II Collet Activated Fracturing System: Since the Stage System rollout in May, 2016 the Bowhead Technology has been successfully deployed in the Eagle Ford, Cardium and Montney formations. By the end of Q1 2017, the Stage System is expected to have been deployed in the Montney, Cardium, Permian, Eagle Ford, Scoop, Uinta, and Bakken formations. A Stage System is scheduled to be shipped to China in the near-term and deployed by the end of January, 2017.
  • Sale of 10% Minority Interest in Stage to Blackbird: On November 23, 2016, Stage closed the sale of an indirect 10% minority interest in Stage to Blackbird for a cash purchase price of $3.0 million. Blackbird will receive access to the Stage System for cost plus an administration fee, in addition to receiving preferential access to the Bowhead Technology.

Record Setting 76 Stage Pin-Point Completion without Coil Tubing Assist

In November, 2016, the Stage System was successfully deployed by Blackbird in its 3,757 tonne, 76 stage pin-point 102/2-20-70-7W6 ("02/2-20") Upper Montney completion program (the "Program") near Grande Prairie, Alberta. The 02/2-20 well represents the highest tonnage and rate fracture stimulation (up to 10 M3/minute, 63 barrels per minute) ever completed in a 4.5" monobore Montney well without coil tubing assist.

The majority of the Program was completed without interruption as collet / sleeve engagement can be accomplished within minutes of finishing the previous stage. This advantage coupled with the pumping rates discussed above contributed to the timely completion of stages throughout the wellbore. On average, each stage was completed in approximately 1 hour, with the fastest stage taking only 45 minutes. This achievement with respect to pumping time and efficiency substantially reduced Blackbird's direct and indirect costs, in addition to its social and environmental impact.

Please see the link below to view Blackbird's news release dated November 18, 2016, which outlines the performance of the Stage System in Blackbird's 02/2-20 well.

https://www.blackbirdenergyinc.com/news/blackbird-announces-successful-02-2-20-d-and-c-program-using-stage-system-planned-closing-of-stage-acquisition-d-and-c-cost-reduction-initiation-of-accelerated-business-plan-and-timing-of-production

The Stage System runs a dissolvable ball on collet that activates sliding sleeves, and it features a constant ID wellbore that is cementable in place, allowing for longer laterals, tighter spacing, higher pump rates and higher tonnages. The Bowhead Technology provides pin-point fracturing capability to operators which is anticipated to increase expected ultimate recovery ("EUR"), improve water management and provide continuous operations with deployment under pressure capability.

Please see Figure 1 below for an illustration video of the Bowhead Technology in the wellbore.

Figure 1 - Stage Bowhead II Illustration Video

https://www.youtube.com/watch?v=KGUZzbXNmB8

Sean Campbell, Chief Executive Officer and President of Stage stated: "The Bowhead Technology allows operators to achieve pin-point fracturing, longer laterals, an increased number of stages, higher frac rates and higher tonnages per linear meter. These higher rates and tonnages increase the potential EUR of the well, which has a positive impact on net present value. When these economic benefits are combined with the reduced completions risk offered by the Stage System, the Bowhead Technology offers a compelling opportunity for our customers to gain a competitive advantage. I would like to thank Blackbird for allowing Stage to participate in their highly innovative and high impact completion. Blackbird's 02/2-20 completion represents what can be accomplished when innovative technology is used to enhance an operator's completion from both an operational and cost standpoint."

For more information on Stage's 76 Stage pin-point sleeve record please see the linked case study.

Successful Rollout of the Bowhead II Collet Activated Fracturing System

Stage Completions was introduced to the market in late May, 2016 and the Bowhead Technology has been successfully installed and tested in three wells:

  • Blackbird's Cardium water disposal well during July, 2016;
  • An Eagle Ford well in September, 2016; and
  • Blackbird's 02/2-20 Montney well during November, 2016.

Stage's management is currently in negotiations for the Stage System to be deployed in every major unconventional resource by the end of Q1 2017. Please see Figure 2 for an illustration of where the Stage System has already been deployed, and/or where it is expected to be deployed by Q1 2017.

Figure 2 - Roll Out Achievement

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A Stage System is scheduled to be shipped to China in the near-term and deployed by the end of January, 2017.

The broad absorption and acceptance of the Bowhead Technology speaks to the desire of producers to achieve longer laterals, tighter spacing, higher pump rates, and pin-point fracturing - and to ultimately yield superior capital efficiencies through increased productivity and EUR.

Stage has further enhanced the Bowhead Technology and now utilizes a collet launcher, allowing collets to be loaded and launched with no personnel in the red zone and without shutting down between stages. Please see Figure 3 and Figure 4 for pictures of the collet launcher.

Figure 3 - Collet Launcher

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Figure 4 - Collet Launcher

http://www.marketwire.com/library/20161128-BB3isLRG.jpg

A third-party real-time collet monitoring process is now in place. This system allows operators to see a signature when the collet passes each stage through the horizontal wellbore, and as it lands in the corresponding valve. This provides certainty of collet engagement through all stages of the wellbore.

Another benefit of the sliding sleeves within the Bowhead Technology is that it is an asset in the wellbore. The sliding sleeves may be opened / closed after installation if required. Operators now have the ability to re-fracture stages and to close-off certain stages as desired.

Sean Campbell stated: "The adoption of the Bowhead Technology in multiple formations is a testament to the benefits of the Stage System. The early adopters of the Stage System have worked very well with Stage, and allowed for our team to further enhance the Stage System's features. The best practices developed as a result of these enhancements will only serve to increase the demand for the Stage System as we move forward. The most exciting aspect of this rollout is that early adopters of the Bowhead II system are identifying new benefits that are enhancing their operations - further contributing to our value proposition."

Sale of 10% Minority Interest in Stage to Blackbird

On November 23, 2016, Stage closed the sale of an indirect 10% minority interest in Stage to Blackbird for a cash purchase price of $3.0 million (the "Transaction"). As part of the Transaction, Blackbird will receive access to the Stage System for cost plus an administration fee, in addition to receiving preferential access to the Bowhead Technology.

Please see Figure 5 for a picture of Garth Braun, Chairman, Chief Executive Officer and President of Blackbird and Sean Campbell, President and Chief Executive Officer of Stage, closing the Stage Acquisition.

Figure 5 - Garth Braun and Sean Campbell Closing the Stage Acquisition

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Sean Campbell stated: "The synergies that the Blackbird / Stage relationship has created will provide benefit for both companies for many years to come. Blackbird's utilization of the Bowhead Technology in their water disposal well and in their 02/2-20 Montney well has helped Stage to further enhance the Bowhead Technology, while Blackbird is to receive what we believe is a material benefit in terms of cost savings and access. As a result, this unique synergistic relationship strengthens the value proposition for both companies, and I look forward to the many benefits that this association will continue to bring as we build our respective organizations - one stage at a time."

About Stage

Stage Completions Inc. is a highly innovative completion technology company with focus on multistage completions in the North American and International marketplaces.

For more information about Stage and the Bowhead Technology, including recent case histories, please view the Stage website at www.stagecompletions.com

About Blackbird

Blackbird Energy Inc. is a highly innovative oil and gas exploration and development company focused on the condensate and liquids-rich Montney fairway at Elmworth, near Grande Prairie, Alberta.

For more information, please view the Blackbird Corporate Presentation at www.blackbirdenergyinc.com

Advisories and Forward-Looking Information

Statements and information contained in this News Release relating to the Stage System, other than those pertaining to the deployment of the Stage System in Blackbird's Cardium water disposal well and the 02/2-20 well, have been furnished by Stage and Blackbird has relied upon Stage to ensure that the News Release contains full, true and plain disclosure. Although Blackbird has no knowledge that would indicate that any statements contained herein concerning the Stage System are untrue or incomplete, neither Blackbird nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such statements and information.

This press release contains certain forward-looking statements or information (collectively referred to herein as "forward-looking statements") relating directly or indirectly to Blackbird. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements and are not guarantees of future performance of Blackbird.
Such forward-looking statements include but are not limited to the operational capability of the Stage System and its ability to reduce completions risk and cost while increasing EUR and net present value, the expected future deployment of the Stage System by operators in all major unconventional resources by the end of the first quarter of 2017 as well as its utilization in a completion in China by the end of 2016, Blackbird's preferential access to the Stage System at a preferential price and the synergistic nature and value of the relationship between Blackbird and Stage and potential future benefits to be derived therefrom such as a possible increase in Blackbird's value proposition. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits Blackbird will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates, and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic and business conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with oil and gas exploration, development, production and services including drilling and completion risks, (3) the price of and demand for oil and gas and their effect on the economics of oil and gas exploration, (4) any number of events or causes which may delay or cease exploration and development of Blackbird's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems, (5) the risk that Blackbird does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, and (8) other factors beyond control. Should one or more of these risks or uncertainties materialize, or should any of Blackbird's assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. Readers are cautioned that the foregoing list of risks, uncertainties, and other factors is not exhaustive.
Unpredictable or unknown factors not discussed could also have material adverse effects on forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent on other factors, and Blackbird's course of action would depend on its assessment of the future considering all information then available. All forward-looking statements in this press release are expressly qualified in their entirety by these cautionary statements. Except as required by law, Blackbird assumes no obligation to update forward-looking statements should circumstances or management's estimates or opinions change.

THE TSX VENTURE EXCHANGE INC. HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE. 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 press release.

To view the video and photos associated with this press release, please visit the following links:

https://www.youtube.com/watch?v=KGUZzbXNmB8

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http://www.marketwire.com/library/20161128-BB2LRG.jpg

http://www.marketwire.com/library/20161128-BB3isLRG.jpg

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