TUSK Energy Corporation

TUSK Energy Corporation

January 24, 2006 11:33 ET

TUSK Updates Mega-Venus Activity

CALGARY, ALBERTA--(CCNMatthews - Jan. 24, 2006) - TUSK Energy Corporation (TSX:TSK) ("TUSK") is pleased to provide an update on its activities in the Mega-Venus area of northwest Alberta.

Newly Released Wells

A well at 6-36-101-9 W6M, approximately 15 miles to the northwest of the Mega discovery well, was drilled through the Keg River zone to a total depth of 2,652 metres in January, 2005 and cased to total depth. The preliminary results of production testing currently underway indicates flow rates of 1.4 to 1.5 million cubic feet per day ("MMcfd") of natural gas at 1,160 psi with between 40 and 45 barrels per day ("bpd") of stabilized condensate. Testing is continuing at this time.

A well at 4-2-101-7 W6M, approximately 3 miles to the west of the Mega discovery well, was drilled through the Keg River zone to a total depth of 2,460 metres in January, 2005 and cased to total depth. The well was tied-in for production in May, 2005 without any stimulation and produced with an initial rate of 210 barrels of oil equivalent ("boepd"). Production decreased rapidly and the well was shut-in to await the work-over of the zone. A service rig is currently on the 4-2 location.

A well at 3-6-101-6 W6M, less than a mile to the southwest of the Mega discovery well, was drilled to a total depth of 2,420 metres in early February, 2005. The Keg River zone was completed later that winter and the well was tied-in for production in May, 2005. The Alberta Energy Utilities Board ("AEUB") granted Good Production Practice ("GPP") status and the well has produced at a stabilized rate of 130 barrels of oil per day ("bopd") with minor amounts of water since that time.

Winter 2005-2006 Activity

Two service rigs are in the Mega-Venus area working on TUSK wells. In addition to the work described above, an extended pressure test of the Mega 12-05 discovery well indicated little or no decline in reservoir pressure after the removal of more than 50,000 barrels of light oil. The well has been producing since May, 2005 at average rates, restricted by AEUB regulation and by the fluid handling capability at the southern terminus of the Mega pipeline, of 220 to 250 bpd of light (52 degrees API) oil.

Two drilling rigs are currently in the area. The first well, which was spud on January 1, has been drilled through the Keg River zone and is preparing to log. The second well, which was spud on January 6, is currently drilling. TUSK continues to work on getting additional drilling equipment into the area. A third drilling rig (newly constructed and contracted to TUSK for 3 years) will arrive later this week. Dependent upon the efficiency of the drilling process, it is probable that the total number of new Keg River penetrations during this winter season will be between six and nine.

Two 3-D seismic programs covering 59 square kilometres and 53 square kilometres are planned for this winter. The first program will be shot in the general Venus area and will commence immediately. It is anticipated that both programs will be completed by mid-March.

The route for additional 6" pipeline to move production from the northwest part of the Mega-Venus project area has been surveyed. Design work on facilities able to handle anticipated increased volumes is essentially completed.

Forward Looking Statements - Some of the statements contained in this news release are forward-looking statements. Forward-looking statements may include, but are not limited to, statements concerning estimates of recoverable hydrocarbons, expected hydrocarbon prices, expected costs, statements relating to the continued advancement of the Company's projects and other statements which are not historical facts. When used in this document, and in other published information of TUSK, the words such as "could," "estimate," "expect," "intend," "may," "potential," "should," and similar expressions are indicative of a forward-looking statement. Although TUSK believes that its expectations reflected in the forward-looking statements are reasonable, the potential results suggested by such statements involve risk and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Various factors, which could cause actual results to differ from these forward-looking statements, include the potential that TUSK's projects will experience technical and mechanical problems, geological conditions in the reservoir which may negatively impact levels of oil and gas production and changes in product prices and other risks not anticipated by TUSK or disclosed in TUSK's published material. Since forward-looking statements address future events and conditions, by their very nature, they involve inherent risks and uncertainties.

Contact Information

  • TUSK Energy Corporation
    Norman W. Holton
    Chairman and Chief Executive Officer
    (403) 264-8875
    TUSK Energy Corporation
    Gordon K. Case
    Vice President, Finance & Chief Financial Officer
    (403) 264-8875