Waldron Energy Corporation

Waldron Energy Corporation

July 09, 2012 07:00 ET

Waldron Energy Corporation Announces Operational Update

CALGARY, ALBERTA--(Marketwire - July 9, 2012) - Waldron Energy Corporation (TSX:WDN) ("Waldron" or the "Corporation") is pleased to provide an operational update regarding the successful drilling and completion of a 60% working interest Crystal 1-32-44-3W5 horizontal Glauconite oil well (the "1-32 well"). With the success of the 1-32 well, the Corporation has now identified three prospective oil plays in the Crystal/Ferrybank area.

Over a three day period, the 1-32 well tested cumulative volumes of 950 barrels of light oil and 4.8 Mmcf of liquids rich natural gas (70 barrels of liquids per million cubic feet of gas). A pumpjack will be installed and the well is expected to be on production by the end of July 2012.

Additionally, Waldron has over 25 sections of 100% working interest Duvernay rights in the Ferrybank/Crystal area. Ninety percent of these lands are contiguous and are located at Ferrybank in the East Shale Basin which is prospective for light oil. The first Duvernay oil well, located at 04-21-038-28W4, was licensed on June 27, 2012 by a major shale oil player offsetting a 1969 well which tested 42 degree API light oil. Exploration activity in the East Shale Basin is expected to increase due to recent land sales and the licensing of the first Duvernay oil well. The Duvernay in the East Shale Basin is characterized as shallow (2,400m) resulting in lower costs, contains high oil in place per section according to industry reports including the Corporation's internal technical analysis and is normal to slightly over pressured with year round access. The technical analysis completed by the Corporation indicates its Ferrybank lands are highly prospective for Duvernay light oil.

During the first four months of 2012, Waldron drilled and tied-in two successful horizontal Belly River oil wells and performed one minor workover in Belly River at Ferrybank which added approximately 130 barrels of oil per day beginning in April 2012. The Corporation has engaged an independent reservoir engineering company to review historical pool performance and help determine a development strategy to maximize oil recovery. Waldron's Ferrybank lands are 100% owned and operated by the Corporation with facilities in place to handle the waterflood and future drilling. The Belly River oil pool provides the Corporation with a substantial developmental oil play opportunity. Waldron has 100% working interest in twelve sections of lands on the pool with estimated discovered original oil in place of 61 million barrels of which approximately 5.8% or 3.6 million barrels of oil has been produced from Waldron's wells. Waldron estimates that infill drilling with horizontal oil wells and reactivation of the waterflood could improve the recovery to 17% - 20% (10 - 12 million barrels) as demonstrated in similar Belly River pools in the area. The Belly River oil pool at Ferrybank is characterized by its shallow depths (1,000 meters TVD), low capital per well ($1.5 - $1.9 million), repeatable development drilling with large oil in place, oil quality of 35° API, low declines within an existing water flood and minimal Belly River oil reserves that have been booked by Waldron. Over the summer at Ferrybank, Waldron plans to spud a vertical new pool exploration well targeting Belly River light oil.

The Corporation continues to actively pursue asset dispositions as part of a continuing effort to streamline the asset base and manage the balance sheet and capital program.

Investor Information

Waldron is a Calgary, Alberta based corporation engaged in the exploration, development and production of petroleum and natural gas. The Corporation's common shares are currently listed on the TSX under the trading symbol "WDN." Additional information regarding Waldron is available under the Corporation's profile at www.sedar.com or at the Corporation's website, www.waldronenergy.ca.

Forward Looking and Cautionary Statements

This news release contains forward-looking statements relating to the Corporation's plans and other aspects of the Corporation's anticipated future operations, strategies, financial and operating results and business opportunities. These forward-looking statements may include opinions, assumptions, estimates, management's assessment of value, reserves, future plans and operations.

Forward-looking statements typically use words such as "will," "anticipate," "believe," "estimate," "expect," "intend," "may," "project," "should," "plan," and similar expressions suggesting future outcomes, and include statements that actions, events or conditions "may," "would," "could," or "will" be taken or occur in the future. Specifically, this press release contains forward-looking statements relating to success of the 1-32 well; results of testing; timing of operations; prospectively and characteristics of the Duvernay; whether or not there is an increase in exploration activity; characteristics of the Belly River oil pool at Ferrybank including recovery rates; and whether asset dispositions are successful or not. The forward-looking statements are based on various assumptions including expectations regarding the success of current or future drill wells; the outlook for petroleum and natural gas prices; estimated amounts and timing of capital expenditures; estimates of future production; assumptions concerning the timing of regulatory approvals; the state of the economy and the exploration and production business; results of operations; business prospects and opportunities; future exchange and interest rates; the Corporation's ability to obtain equipment in a timely manner to carry out development activities; and the ability of the Corporation to access capital and credit. While the Corporation considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward-looking statements are subject to a wide range of assumptions, known and unknown risks and uncertainties and other factors that contribute to the possibility that the predicted outcome will not occur, including, without limitation: risks associated with oil and gas exploration, development, exploitation, production, marketing and transportation; loss of markets; volatility of commodities prices; currency fluctuations; imprecision of reserves estimates; environmental risks; competition from other producers; inability to retain drilling rigs and other services; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions; general economic conditions; delays resulting from or inability to obtain required regulatory approvals and to satisfy various closing conditions; and ability to access sufficient capital from internal and external sources. Readers are cautioned that the foregoing list of factors is not exhaustive.

Although Waldron believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will be realized. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements and you should not rely unduly on forward-looking statements. The forward-looking statements contained in this news release are made as of the date of this news release. Except as required by applicable law, Waldron does not undertake any obligation to publicly update or revise any forward-looking statements.

Note Regarding BOEs

The term barrel of oil equivalent ("boe") may be misleading, particularly if used in isolation. A conversion ratio for gas of 6 mcf:1 boe is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is misleading as an indication of value.

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