Twoco Petroleums Ltd.

Twoco Petroleums Ltd.

September 08, 2011 09:00 ET

Twoco Petroleums Ltd. Announces Increased Production

CALGARY, ALBERTA--(Marketwire - Sept. 8, 2011) - Twoco Petroleums Ltd. ("Twoco" or the "Company") (TSX VENTURE:TWO) is pleased to announce that it has placed on production its previously announced 2 gross (1.93 net) tri-leg horizontal oil wells on the Company's Sparky heavy oil play in the Warspite area of Alberta.

Based on the initial 10 days of production, the Twoco HZ Bellis 15-34-58-17W4 well flowed at an average rate of 193 boe/d (includes 110 bbls/d of oil ("bopd") and 83 boe/d of natural gas). The flowing rates for this well will be monitored and a pump will be installed when operating conditions dictate. Based on the initial 11 days of production, the Twoco HZ Bellis 14-35-58-17W4 well was pumping at an average rate of 146 boe/d (includes 129 bopd and 17 boe/d of natural gas). Natural gas production from both wells is being conserved in accordance with the Energy Resources Conservation Board ("ERCB") regulations via pipeline tie-in to the Company's Warspite gas gathering system.

Twoco's total current corporate production is now estimated at 900 boe/d (includes 290 bopd and 610 boe/d of natural gas). Twoco also estimates that an additional 150 boe/d of shut-in and behind pipe natural gas production exists which can be placed on stream upon the improvement of natural gas prices.

These two new oil wells are the third and fourth horizontal oil wells successfully drilled on the Company's Sparky heavy oil property and represent a continuation of the Company's plan to strategically diversify its commodity mix by targeting exploration towards oil prospects it has identified on its existing lands. The first two wells on the Sparky heavy oil play were single leg horizontal wells that were placed on production in December 2010.

The Company will continue to monitor production from its existing wells on the Sparky heavy oil play and also from wells in analogous pools with a view to optimizing production and reserves recovery by utilizing different drilling techniques, wellbore configurations, completion practises, equipping systems and utilization of secondary and tertiary recovery potential. Twoco has commenced field operations for the drilling of 4 additional multi-lateral horizontal oil wells on the Sparky heavy oil play in the fourth quarter of 2011.

The average cost per well of drilling, completing and equipping the 2 tri-leg horizontal oil wells was approximately $1,350,000. These costs were higher than originally estimated due to the extremely wet surface conditions encountered during drilling and completion operations. Twoco believes that future drilling costs on its Sparky heavy oil lands could be significantly reduced in a multi-well drilling program.

Twoco currently controls 2,727 net prospective acres on its Sparky heavy oil play which represents approximately 68% of the total estimated pool area. As previously announced, Twoco received approval from the ERCB which amended the drilling spacing on the Company's Sparky heavy oil property to allow for the drilling of up to 8 horizontal lateral legs per pool per quarter section. As a result of the ERCB's approval, Twoco has identified drilling locations for up to an additional 120 horizontal laterals on the Company's Sparky heavy oil lands.

Twoco will review all capital expenditures on a regular basis throughout 2011 and adjust spending based on factors such as changes in commodity prices, availability of capital and drilling and production results.

Twoco is an oil and gas company engaged in the exploration for, and the acquisition, development and production of, oil and natural gas reserves primarily in the Province of Alberta.

In this news release the calculation of barrels of oil equivalent (boe) is calculated at a conversion rate of six thousand cubic feet (Mcf) of natural gas for one barrel (Bbl) of oil based on an energy equivalency conversion method. Boes may be misleading particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1Bbl is based on an energy equivalency conversion method primarily applicable to the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements:

Certain information set forth in this news release contains forward-looking statements or information ("forward-looking statements"), including statements regarding plans to strategically diversify the Company's commodity mix, the reduction of drilling costs, optimization of production, the timing and drilling of additional wells, potential drilling locations and the area of the heavy oil pool. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond Twoco's control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of reserve estimates, environmental risks, operational risks in exploration and development, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and the ability to access sufficient capital from internal and external sources. Although Twoco believes that the expectations in our forward-looking statements are reasonable, our forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated or implied in the forward looking information. As such, readers are cautioned not to place undue reliance on the forward looking information, as no assurance can be provided as to future results, levels of activity or achievements. The risks, uncertainties, material assumptions and other factors that could affect actual results are discussed in our Annual Information Form and other documents available at Furthermore, the forward-looking statements contained in this document are made as of the date of this document and, except as required by applicable law, Twoco does not undertake any obligation to publicly update or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy securities in any jurisdiction.

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

  • Twoco Petroleums Ltd.
    Wayne A. Malinowski
    President and Chief Executive Officer
    (403) 231-8653
    (403) 237-6048 (FAX)