October 08, 2009 12:34 ET

Subject: New Alberta Fernie Formation Black Shale Natural Gas Play

VANCOUVER, BC--(Marketwire - October 8, 2009) -


Subject: New Alberta Fernie Formation Black Shale Natural Gas Play

Thursday October 8, 2009, Steven Schurman, CEO, US Prof. Geologist, Director, reports:

Further to the Company's news release of July 30, 2009, a new black shale, natural gas production opportunity appears to be developing in southwest Alberta where Running Fox has an interest in the 28 square mile Pincher Creek Natural Gas Project. Similar to many sedimentary basins in the United States with black shale that are currently experiencing extensive exploration drilling for natural gas, it has been recognized that the Jurassic-age Fernie Group in Alberta also contains thick sequences of highly organic, shale, natural gas source rock.

Since 2005, Running Fox has participated in the development of the Pincher Creek project and since that time has been producing natural gas and condensates. Over the years, the Pincher Creek project has yielded average revenue of $1 million per year to Running Fox's interest from a conventional gas zone in the Livingston Formation.

As with the U.S. black shale projects, the Fernie Group shale in Alberta is not only the source of the natural gas but also acts as the reservoir rock for the natural gas. The presence of natural gas in shale formations has been known for many years but only in the past decade have gas well completion techniques been developed that can successfully recover the natural gas from "tight" shale formations in commercial quantities.

Shales are tight, and gas typically flows through fractures, and additional manmade frac operations can open new fractures in some cases over 2,000 ft from the well bore, as noted by global oilfield services giant Schlumberger Ltd. Some new technological advances for shale development are:

* 3-D seismic in determining lateral length and placement;

* Multilaterals (drilling several laterals from a single well pad);

* Multiple frac stages within a lateral;

* Real-time microseismic monitoring to image hydraulic-fracture treatments;

* Simul-fracs (simultaneous hydraulic fracturing of offset parallel horizontal wells about 1,000 feet apart);

* Seismic technology is playing an increasing role in shale gas appraisal and development. Generally, the industry has been driven by technological advances in horizontal drilling and fracture stimulation techniques. In the U.S., some of the best known black shale natural gas producing formations include the Barnett Shale, New Albany and Bakken formations where gas resources can be up to 100 Bcf per section. The recognition that black shale is also present in the Canadian sedimentary basins has sparked strong interest in exploring Canadian shale formations such as the Fernie Group.

Importantly, Shell Canada Ltd (Royal Dutch Shell) acquired Duvernay Oil Corp which had a large block of land covering the Alberta Montney Shale in a deal worth $5.9 billion in cash and debt.

In the Pincher Creek project area, the Fernie Group shale is from 300 to 500 feet in thickness and when the initial Pincher Creek discovery well was drilled in 2005 it was noted that there were numerous strong gas kicks and anomalies detected as the well logging tools passed through the Fernie Group shale. In 2005 the Fernie Group shale gas anomalies were an interesting natural gas occurrence but recent shale fracturing and well completion techniques developed in the U.S. shale gas plays suggest that the gas anomalies found in the Fernie Group in the Pincher Creek project area may also be a strong candidate for economic gas development.

Running Fox is now evaluating the extent of the Fernie Group shale in the Pincher Creek project area and is formulating a path forward to determine testing and development of shale natural gas in the Project.

Additionally, there are financial incentives provided by the Alberta government that apply to the development of unconventional natural gas from shale formations in Alberta.

Significantly, the whole area is developed with existing infrastructure, pipelines, and processing plants with excess capacity which will assist the economics of a new shale play in the area.

Shale natural gas drilling and production in Alberta is also expected to increase the need for oilfield services. Running Fox's subsidiary, Alberta-based Claymore Oilfield Services Group, is well positioned to benefit from any increase in natural gas drilling and production by providing technical expertise related to the Alberta natural gas and oil industry, manpower, and field equipment.

The Company has upside leverage to important commodities including oil and gas, uranium and gold.

2008 revenues exceeded $9.3 million.

Running Fox is a Canadian growth-oriented small cap company developing four key divisions:

* Uranium and Gold Exploration Mineral Projects

* Oil and Natural Gas Exploration and Production

* Energy Sector Oilfield Services and Technology, and

* Environmental Services - Encapsulation and Remediation

The Company has approximately 41 million shares issued and outstanding and trades on the Toronto Stock Exchange- Venture.

On behalf of the Board of Directors:

Steven Schurman, CEO, US Prof. Geologist, Director Running Fox Resource Corp.

Alberta (403) 742 0527 www.foxgold.ca

The Company relies on legislation applicable to forward looking statements, seeking safe harbour.

This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.

Copyright © Hugin AS 2009. All rights reserved.

Contact Information

  • Steven Schurman
    CEO, US Prof. Geologist, Director
    Running Fox Resource Corp.

    Alberta (403) 742 0527