Valkyries Petroleum Corp.
TSX VENTURE : VPC

Valkyries Petroleum Corp.

March 30, 2006 10:04 ET

Valkyries Updates Onshore Kalmykia Operations

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 30, 2006) - Valkyries Petroleum Corp. (the "Company") (TSX VENTURE:VPC) is pleased to provide an update on its current development activities on the Caspian Field, onshore Kalmykia in Russia.

The Company has completed drilling its first two horizontal wells in the field on which the Company owns a 51% interest. Well K-72 was completed and placed on production during mid-December. Drilling of Well K-73 was completed in March and the well is presently being placed on production.

The K-72 well drilled a total horizontal section of 881 feet and had apparent sand pay of 594 feet using downhole logs and cuttings analysis. The entire Bayos II main productive interval was cored and yielded a high portion of sand with porosity above 16% and permeabilities ranging up to 80 millidarcies. This permeability figure is significantly better than the 10 millidarcy figure used in the most recent third party reserve report (ECL May 19, 2005). The well initially produced at a stabilized rate of 380 barrels of oil per day with a stable fluid level 3050 feet above the pump using a small electric submersible pump. Due to the strong performance of the well the decision was made to install a larger submersible pump. Following the installation of this larger pump, the well has produced at rates in excess of 500 barrels of oil per day. Pump optimization is still ongoing.

Well K-73 encountered the Bayos section more than 26 feet above the prognosis giving additional zones available for completion. The total length of the horizontal section is 1030 feet, with a net pay of approximately 890 feet. Extensive swabbing has been carried out on the well to determine the well potential and properly size a submersible pump. At a stable fluid level of more than 3400 feet above the probable pump setting depth, the well was swabbed at a rate of 440 bopd. A rig is presently rigging up to run an electrical submersible pump into the well and stabilized rates are expected to be in the 700 - 800 barrel per day range.

Several of the existing wells have also seen improvement due to the ongoing workover program and the total field production as of today is over 1180 barrels of oil per day, compared to the 435 bopd rate when the field was taken over less than 1 year ago. When the pumps on the two horizontal wells have been optimized, production is expected to be in excess of 1700 bopd. Based on the success of these first two horizontal wells, the decision has been taken to continue the horizontal drilling development program in the field and the K-100 well is planned to be spud by mid-April.

Valkyries President and CEO Keith Hill stated, "These wells demonstrate that the main reservoir is far better quality than originally believed. This result will allow us to move forward aggressively with full field development plans. We expect to see a marked increase in our reserves once this data is incorporated into our reservoir model. We are also happy to see the improved field production performance which will generate cash flow to assist in the full development of the project."

Valkyries Petroleum Corp. is an upstream oil and gas company with exploration and producing interests in Russia and is currently in advanced stages of evaluation and negotiation on several additional projects in Russia.

Forward-looking statements: This press release contains statements about expected or anticipated future events and financial results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, the regulatory process and actions, technical issues, new legislation, competitive and general economic factors and conditions, the uncertainties resulting from potential delays or changes in plans, the occurrence of unexpected events, and management's capability to execute and implement its future plans. Actual results may differ materially from those projected by management.

ON BEHALF OF THE BOARD

Keith C. Hill, President

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

Contact Information

  • Valkyries Petroleum Corp.
    Sophia Shane
    Corporate Development
    (604) 689-7842
    (604) 689-4250 (FAX)
    www.valpete.com