Credo Petroleum Updates Drilling Activities
04 May 2010 - 10:00PM
Business Wire
Credo Petroleum Corporation (NASDAQ: CRED), an oil and gas
exploration and production company with significant assets in North
Dakota, Central Kansas and Oklahoma, today updated its drilling
activities.
North Dakota Williston
Basin
Dunn County, North Dakota—Credo has leased approximately
8,000 gross (6,000 net) acres on the Fort Berthold Reservation
containing about 50 drillable spacing units. The acreage is
generally located south and west of Parshall Field. The company’s
interests range up to 51% depending on the size of the spacing
unit. The Reservation is surrounded on three sides by horizontal
Bakken production, and drilling activity is escalating rapidly.
The company’s first Bakken horizontal well, the Petro Hunt
148-94-17D-08-1H (“17-D”), has been on production for 83 days and
is currently flowing without artificial lift. During initial
testing, the well flowed 1,267 barrels of oil and 1.24 million
cubic feet of gas, or 1,474 barrels of oil
equivalent (Boe), over a 24-hour period. Through the first 60
days the well flowed 32,000 Boe.
“The 17-D looks like an outstanding well,” said Marlis E. Smith,
Jr., Chief Executive Officer. “Production during the first 60 days
is more than twice the 60-day average for 50 horizontal Bakken
wells in the surrounding area. Credo currently owns interests in
about 50 Bakken/Three Forks spacing units, and I expect multiple
wells to be drilled in many of those units.”
The company owns a 10% working interest in the 17-D, and
interests ranging from 5% to 51% in 17 spacing units located
in the immediate vicinity of the 17-D well. Credo’s second Bakken
well is expected to commence drilling in June. The 147-94-3A-10-1H
(“3-A”) well will be drilled on a 1,280 acre spacing unit located
about four miles southeast of the 17-D. The 3-A well will also be
operated by Petro-Hunt, and Credo owns an 18.75% working
interest.
Williams County, North Dakota—Credo recently moved into a
highly prospective area of Williams County by purchasing a 6%
interest in a 1,280 acre spacing unit operated by Brigham
Exploration. The spacing unit is located about one mile east of
Brigham’s Olson 10-15-H well which has produced almost 110,000 Boe
in 14 months. Credo expects that at least two Bakken wells will be
drilled in the spacing unit.
Kansas
Credo has significantly increased its acreage holdings on the
Central Kansas Uplift and western Kansas, and currently owns
147,000 gross (85,000 net) acres. The acreage contains about 34
blocks in which the company owns interests ranging from 12.5% to
100%. Credo is continuing an aggressive prospect generation and
lease acquisition program.
To date, Credo has drilled 56 wells on its Central Kansas Uplift
acreage, of which 45% have been successful. The company is
currently drilling two to three wells per month and expects to
maintain that pace for at least the next few years.
Recent wildcat discoveries include the Campbell #18-1 and the
Keith #13-1, both located in Graham County. The Campbell was
completed pumping 75 Bopd and establishes first production on a
large seismic feature for the area. A second well on this feature
is scheduled for June. The Keith is currently awaiting completion
after yielding good oil recovery on drill stem tests. This well
also establishes production on a prominent seismic feature that has
good development potential. Credo owns 27% and 46% working
interests in the wells, respectively.
Last year, Credo discovered a significant new field in Barton
County, Kansas in which it owns an 85% working interest. That field
has produced over 100,000 barrels of oil in about 15 months.
Six miles to the north, Credo is preparing to drill its
Roessler Prospect where it owns an 80% working interest.
Management
Comment
Smith further commented, “Credo is in the right places to
continue successfully building our oil production and reserves. Our
Bakken acreage is located in one of the sweet spots, and production
results on our first well are very encouraging. The Bakken is the
premier oil resource play in the United States. The U.S. Geological
Survey estimated that up to 4.3 billion barrels of oil could be
recovered using current technology. In addition, a new study by the
North Dakota Industrial Commission concluded that the Three
Forks-Sanish Formation, situated about 50 feet below the Bakken,
may hold an additional 1.9 billion recoverable barrels.
“We are equally excited about our Kansas shallow oil drilling
projects. Our success in Central Kansas continues to be
outstanding, and the play has already made a substantial
contribution to our oil production and reserves. The Kansas play is
relatively inexpensive with short discovery to first production
cycle times. This makes it an excellent complement to the deeper
and longer cycle Bakken drilling and Oklahoma waterflood
projects.
“Credo’s numbers already reflect our oil drilling success. Last
year the increased oil component in our portfolio drove a 23%
increase in production when calculated on the price equivalent
basis that goes to our bottom line. The economic benefit of
increased oil production was apparent last year when oil accounted
for 59% of revenues while representing only 36% of energy
equivalent-production. We are going to build on this momentum in
2010.”
For more information about the company, visit
http://www.credopetroleum.com.
Credo Petroleum Corporation is a publicly traded independent
energy company headquartered in Denver, Colorado. The company is
engaged in the exploration for and the acquisition, development and
marketing of natural gas and crude oil in the Mid-Continent and
Rocky Mountain regions. The company’s stock is traded on the NASDAQ
System under the symbol “CRED” and is quoted daily in the “NASDAQ
Global Market” section of The Wall Street Journal.
This press release includes certain statements that may be
deemed to be “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements included in this press release, other than statements of
historical facts, address matters that the company reasonably
expects, believes or anticipates will or may occur in the future.
Such statements are subject to various assumptions, risks and
uncertainties, many of which are beyond the control of the company.
Investors are cautioned that any such statements are not guarantees
of future performance and that actual results or developments may
differ materially from those described in the forward-looking
statements. Investors are encouraged to read the “Forward-Looking
Statements” and “Risk Factors” sections included in the company’s
Annual Report on Form 10-K for more information. Although the
company may from time to time voluntarily update its prior forward
looking statements, it disclaims any commitment to do so except as
required by securities laws.
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