Vulcan Minerals Inc.

Vulcan Minerals Inc.

October 13, 2010 09:39 ET

Vulcan Minerals Inc.: Active Explorer-Western Newfoundland

ST.JOHN'S, NEWFOUNDLAND AND LABRADOR--(Marketwire - Oct. 13, 2010) - Vulcan Minerals Inc. ("the Company")  (TSX VENTURE:VUL) is pleased to provide the following update on its operations.


Completions Program:

The first stage of Phase I completion work on the Robinsons #1 and Red Brook #2 wells is finished. It consisted of the perforation and pressure testing of two zones in Red Brook #2 and one zone in Robinsons #1. This will be followed by injectivity testing which will provide necessary parameters to design the optimal hydraulic fracture stimulation of the zones. The Company is currently waiting on equipment to mobilize to the sites for injectivity tests. Based on the results of this Phase I program the company expects to carry out a stimulation program to adequately test the flow rates of the prioritized zones. These results will provide reservoir information that will also assist in quantifying the potential natural gas resource of the other untested zones in the wells.

The completion program is the culmination of a wildcat drilling program in the Bay St. George basin of western Newfoundland. The results, combined with additional delineation drilling will provide the necessary information to support a natural gas resource and reserve assessment for the area.

Seismic Program:

The Company is currently carrying out one of the largest seismic programs ever acquired in the onshore area of western Newfoundland. Approximately 130 line kilometres have been cut and surveyed. The drilling of shot holes is underway with approximately 40 line kilometres completed. The recording crew is expected to arrive this week with a scheduled acquisition completion date of late November. The new data will be important in delineating the Jockey structure south of Red Brook and Robinsons as well as refining several drilling leads in other parts of the basin. The data will be processed and interpreted as soon as possible to finalize additional drill targets for 2011.

Flat Bay Oil Deposit:

The Company is planning to re-enter Flat Bay #1 to acquire additional reservoir information. Flat Bay #1 is cased to a depth of 239 metres and encountered a thick oil charged conglomerate in excess of 100 metres gross thickness commencing at a depth of 120 metres. The reservoir has low porosity and permeability. It was previously fracture stimulated over a zone 192 -197 metres in 2004. Though initial flow backs immediately following stimulation were encouraging with an increasing oil cut in the retrieved frac fluid, the well's flow rate and oil cut decreased significantly when a pump jack attempted to pump the well. Based on the physical characteristics of the oil this may be related to the shallow reservoir having a temperature that does not exceed the pour point of the oil. This inhibits any flow of oil into the wellbore. As a result, the Company plans to carry out a detailed temperature survey of the well and perforate a new zone in the well to recover downhole fluid samples. The timing of this program is subject to acquiring the necessary equipment to carry it out, but is expected to occur over the next few weeks. Operational efficiencies will be co-ordinated with the completion operations at Red Brook and Robinsons.

All current operations in the Bay St. George basin are being carried out pursuant to a 50/50 joint venture with Investcan Energy Corporation.


The Company has been advised by the operator of exploration licence 1107 (EL 1107), Investcan Energy Corporation (Investcan), that the offshore seismic program over the licence has been completed. It consisted of approximately 3000 line kilometres of 2D seismic data. The program was carried out pursuant to an earn-in agreement as previously announced on July 27, 2010. In consideration for carrying out the seismic program Investcan earns 20% of Vulcan's current 50% working interest in EL 1107. Vulcan will retain a 30% working interest. EL 1107 was issued on November 15, 2008 to Vulcan and Investcan on a 50-50 working interest basis with a work commitment bid of $9,601,000. The current program and continuing evaluation work will satisfy the bulk of the work bid and provide for the return of the corresponding portion of the $2,400,250 security deposit posted by Investcan. The companies have formed a joint venture to explore and add value to the licence toward attracting a drilling partner. An exploration licence confers the right to explore for petroleum for an initial term of six years (Period I) with a possible additional period of three years (Period II) if a well is drilled on the licence in Period I. EL 1107 is situated proximal to and on trend between the Bjarni-North Bjarni discoveries (approximately 3.1 trillion cubic feet of natural gas) to the northwest and the Gudrid discovery (approximately 924 billion cubic feet of natural gas) to the southeast. The gas quantities of the Bjarni-North Bjarni and Gudrid discoveries are recoverable resources as published by the Canada-Newfoundland and Labrador Offshore Petroleum Board.


The Company is advised by the operator, Nalcor Energy Oil and Gas, that Finnegan #1 is drilling ahead at an approximate depth of 1600 metres having set 340mm casing at 570 metres. Finnegan is the second of a proposed three well program in the Parsons Pond area of western Newfoundland. The well is a wildcat test being drilled to approximately 3,200 metres in an area known historically for numerous oil seeps at surface and in shallow wellbores within the Cambrian Ordovician-Anticosti basin. Finnegan is located approximately 14 kilometres north of the first well of the program, Seamus No. 1. Seamus No. 1 completed drilling in late May to a total depth of 3,160 metres. The well encountered a hydrocarbon-bearing zone that warrants flow testing based on gas shows while drilling and geophysical log responses. The zone is behind casing and the well is currently suspended. In order to determine flow characteristics and the volumes of gas in place, the operator proposes to test the well later this fall with a service rig. This drilling program represents the first deep tests in the Parsons Pond area of western Newfoundland. The Company owns an average blended working interest of approximately 10% in all three exploration permits at Parsons Pond. 

Commenting on the current level of activity for the Company, the President said "this is the most active our company has ever been. We continue to be a leader in the ongoing exploration and development of western Newfoundland. It is a testament to the hard work and dedication of our dynamic team at Vulcan and the contractors we employ. We continue to leverage our involvement in multiple projects, providing our shareholders with the greatest exposure to a commercial petroleum discovery in these under explored areas."

Vulcan is a diversified junior exploration company focused on petroleum exploration in the under-explored western Newfoundland and Labrador areas and also holds mineral interests in areas strategic to its operations in Newfoundland and Labrador.

Shares Issued: 54,461,241

There can be no assurance that forward-looking information will prove to be accurate. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from any conclusions, forecasts or projections described in the forward-looking information. Accordingly, readers are advised not to place undue reliance on forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking information, whether as a result of new information, future events or otherwise.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. The statements made in this News Release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations. Certain risk factors may also affect the actual results achieved by the Company.

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