Westcore Energy Ltd.

TSX VENTURE : WTR


Westcore Energy Ltd.

April 16, 2013 18:39 ET

Westcore Provides an Update on Riverside Oil & Gas Property

SASKATOON, SASKATCHEWAN--(Marketwired - April 16, 2013) - WESTCORE ENERGY LTD. (TSX VENTURE:WTR) ("Westcore" or the "Company") is pleased to provide an update on the Riverside property owned by Allstar Energy Limited ("Allstar"), a 100% owned subsidiary of 49 North Resources Inc ("FNR"). This update is based upon information provided by FNR, which has released an operational summary on all of its Allstar operations (see FNR news release dated April 16, 2013). For a complete summary of Allstar operations, readers are encouraged to refer to the foregoing news release by FNR.

In December 2012, Allstar commenced a six well drilling program on the Riverside property, which was based upon 3D seismic commissioned by Westcore (see the Company's press release dated December 13, 2012). Three wells were drilled in the vicinity of each of the 2 wells previously re-completed by Allstar.

Completions of the first 2 wells (15-4 and 8-9) in the 6 well program commenced in January 2013. These wells were initially completed in Success C, the lower most portion of the Success formation. Given information garnered from the re-completed wells, Allstar then moved up in the wellbore in 15-4 to perforate and complete in Success A, the uppermost zone. A total of 15m of Success A was perforated with initial indications being very encouraging, with initial 24 hour pump rates showing production to be about 120 Bbl/d with an approximate 20% oil cut. The final 48 hours of production testing showed the oil cut increasing dramatically to 80-90% with 5-10% sand at roughly 90 Bbls/d.

Westcore has been advised that Allstar intends on perforating the Success A zone on the second of the 2 new wells (8-9) immediately following break-up), as the same upper formation is believed to be present. Initial results and interpretations suggest this upper zone appears to be a very close analogue to production in the Mantario field to the north of Riverside. Additionally, the oil from the upper zone is reported to be of higher quality than experienced in the lower zone (13.9 API as opposed to 11.9 API).

Prior to break-up, the third of 6 wells drilled at Riverside was also perforated in Success C, the lower phase of the formation. Although no pump testing has been performed on the well, field operations have noted that during recent surface wellhead pressure monitoring, the well has now pushed oil to surface and built 70 psi at the well head. This substantial amount of pressure indicates that an over pressured fracture system that may have been perforated. Although the percentage of oil versus water in this well bore is unknown at this time management of Allstar is very encouraged to learn that the formation has enough pressure to push fluid to surface.

A decision has been made by Allstar not to equip 8-9 or the remaining 3 new wells until results from the upper Success completions on the first two wells are fully interpreted and understood. Seismic data shows similar formations in the remaining well bores and Allstar management estimates production from these wells to be very prospective.

Recent results at the Riverside property have validated the interpretation of the 3D seismic, helping define an oil reservoir from which Allstar's re-completed wells are producing. This reservoir is thought to be associated with a depression of the Madison Group Limestone at an unconformity allowing for the accumulation of Success sediments. The heart of the Success has in excess of 45m of total vertical accumulation with 3 major zones within it; Success A, Success B and Success C. All three zones are oil bearing, with only the lower zone, Success C being extensively tested to date. The lower success zone should prove to be very productive once water disposal and other field optimization is put in place.

From Allstar's interpretation, the reservoir consists of a quartz dominated chert/kaolinite breccia along with interbedded sands. Oil appears to reside within the sands as well as within the brecciated fracture planes of chert in the lower parts of the sequence. The majority of the sand appears to be constrained to Success A, with Koalinitic and chert content increasing with depth into Success B and C. This bodes well for the continued development of the Riverside field. As mentioned above, production has only just started from the Success A in the first well and testing is planned for the Success A in the 8-9 well after break-up. The stratigraphy that has now been drill tested in parts of the Riverside property has shown an extremely similar depositional setting to the prolific Mantario field to the north.

Based on current 3D seismic interpretation through the heart of the southwest portion of the Riverside play, this large accumulation of Success sediments covers over 2.5 square miles and is open in 3 directions. Internal mapping based on the drilling and seismic to date has shown in excess of 25 drill targets (on 40 acre spacing) on the southwest portion of the property.

The seismic in the northeast part of the Riverside play showed a very similar depositional setting on top of the Madison unconformity. Westcore has been advised by Allstar that drill results indicated that, although not as prolific, a similar Success formation reservoir exists in the northeast portion of the Riverside lands. Initial indications show an additional 10 targets (on 40 acre spacing) in the northeast based on seismic and drilling results to date. This number is expected to grow significantly as more holes are drilled in the area.

Westcore has been advised by Allstar that prior to the onset of break-up, the Riverside project had total field production of approximately 150 barrels per day, stemming from three wells (two of which precede and are not subject to Westcore's Farm-In Agreement with Allstar). All of Allstar's wells are currently shut in, as the service trucks required to service the wells cannot access the well sites until the road bans are removed which is anticipated to be at the end of May.

Once commercial production has been sustained, Westcore will be entitled to some of the production from the new wells as per the Farm-In Agreement with Allstar and the ownership formula prescribed thereunder (see Westcore's news release dated July 25 2012). Westcore has spent approximately $850,000 to date on the aforementioned 3D seismic survey. In exchange for the completion of the seismic, Westcore will earn a 60% working interest on a pro rata basis of $850,000 applied against total drilling costs on the Riverside Lands in this program. In addition, Westcore has been granted an ongoing right of first refusal to participate in additional programs on the Riverside Lands, whereby Westcore will fund 100% of drilling operations (to a maximum amount of $1 million) for a further 60% working interest in such programs.

All information regarding the Riverside property has been sourced from Allstar Energy Limited.

Reader Advisory

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, the use of the net proceeds of the offering. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information.

Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States and globally; industry conditions, governmental regulation, including environmental regulation; unanticipated operating events or performance; failure to obtain industry partner and other third party consents and approvals, if and when required; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; competition for, among other things, capital, skilled personnel and supplies; changes in tax laws; and the other risk factors disclosed under our profile on SEDAR at www.sedar.com. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

The forward-looking information contained in this news release is expressly qualified by this cautionary statement. We undertake no duty to update any of the forward-looking information to conform such information to actual results or to changes in our expectations except as otherwise required by applicable securities legislation. Readers are cautioned not to place undue reliance on forward-looking information.

Neither the 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

  • Westcore Energy Ltd.
    Colin Taylor
    Vice President Corporate Development
    (306) 649-0600
    www.westcoreenergy.ca