Bakken Drilling
Accelerating
New Shallow Oil Discoveries
Confirmed in Kansas and Nebraska
New Calliope Gas Recovery
System Activity
Credo Petroleum Corporation (Nasdaq:CRED), an independent oil and
gas exploration and production company with significant assets in
the North Dakota Bakken, Kansas, Nebraska, the Texas Panhandle and
Oklahoma, today provided an operations update.
Marlis E. Smith, Jr., Chief Executive Officer, stated, "We are
continuing to add high value oil production from new drilling, at a
time when oil commands a nearly four to one energy equivalent price
advantage over natural gas. The fourth quarter looks to set a new
drilling record, with 19 gross [8.2 net] wells
scheduled. This press release updates our drilling results and
highlights significant new oil drilling activity in the North
Dakota Bakken, our Kansas and Nebraska shallow drilling plays and
recent Calliope successes."
Two Bakken Wells Recently Drilled and
Awaiting Completion;
Five Additional Wells Scheduled for the
Fourth Quarter
In North Dakota's Bakken oil resource play, the Company recently
participated with Marathon Oil Company in drilling two significant
Bakken wells in Dunn County. The horizontal wells, located on
a 2,560 acre spacing unit, have been drilled and cased to total
depths of 19,881' and 18,718' and are currently awaiting fracture
stimulation. Credo owns an approximate 15% working interest in
both wells. The wells are located on the Fort Berthold
Reservation about four miles southeast of the Company's previously
announced Enerplus Ethan Hall, an outstanding Bakken well that has
produced approximately 150,000 barrels of oil in eight months.
"The Company expects to spud five additional Bakken/Three Forks
wells before year end," said Marlis E. Smith, Jr., Chief Executive
Officer. "We have completed eight Bakken wells, all of which
are high rate producers. To put this in a long term
perspective, Credo owns interests in about 50 drillable
spacing units. With the potential for four, or more, wells per
spacing unit—two Bakken and two Three Forks—the Company believes
that it has at least 200 future drilling locations in the
play."
Credo has participated in drilling with Bakken operators
including XTO, Brigham, Williams, Marathon, PetroHunt and QEP
Resources. Working interests have ranged from very small to
18.75%. All but one of the Company's Bakken wells are located in
the core of the play on the Fort Berthold Reservation, south and
west of the Parshall Field where the Company has assembled
approximately 8,000 gross (6,000 net) acres. Drilling
activity on the Reservation has increased substantially in recent
months, following weather related delays experienced earlier in the
year.
Four New Oil Discoveries Added in Kansas
and Nebraska
The Company has recently set production casing on three
indicated oil discovery wells in Kansas. For proprietary
business reasons, the names and locations are not being
disclosed. The wells are currently awaiting
completion. Productive zones include the Lansing Kansas City,
Marmaton, Cherokee, and Johnson formations. The Company
believes two of the three discoveries have offset drilling
potential. The Company is the operator of two of the wells and owns
significant working interests, up to 79%, in each of the
wells.
Also in Kansas, the Company is continuing to develop a new field
discovery by adding a third well to the field. The 4,100 foot
well produced at an initial rate of 118 BOPD (barrels of oil per
day). The field is currently producing approximately 250
BOPD. The Company owns a 46.5% working interest in the
field, which holds significant potential as a future waterflood
candidate.
In southwestern Nebraska, the Company has recently completed its
fourth oil discovery. The new 4,500 foot well tested 50 BOPD
from the Lansing Kansas City. The Company owns a
70% working interest and is the operator. The Company
plans to offset the new discovery later this year.
In Kansas and Nebraska, Credo owns interests in approximately
145,000 gross (82,000 net) acres, and is continuing to expand its
acreage position. The Company's Kansas and Nebraska drilling
activities provide a moderate cost, high return base to the
Company's drilling program through the use of detailed subsurface
geology and 3-D seismic to identify shallow oil prospects. The
Company expects to continue an active drilling program in Kansas
and Nebraska, consisting of two to three wells per month for the
next few years.
Calliope Gas Recovery
System®
A Calliope Gas Recovery System® has recently been installed on
the Ezell #1 located in Woodward County, Oklahoma. The Ezell
has produced 12 billion cubic feet of gas from the Chester at a
depth of 8,000 feet, and was producing marginally at the time
Calliope was installed. Calliope is currently removing liquids
from the well, and is expected to establish gas production of up to
200 Mcf (thousand cubic feet) per day. The Company projects
that Calliope will extend the well's life for many years, and add
about 500 MMcf (million cubic feet) of gas reserves that are
unrecoverable with other liquid removal technologies.
Another Calliope installation is planned this year for a
recently acquired well in Canadian County, Oklahoma. The well
has produced 21 billion cubic of gas equivalent from the Morrow at
10,800 feet.
Discussions are currently underway with domestic and
international companies regarding potential Calliope ventures.
Management Comment
Smith further stated, "We have drilled about 100 wells in our
Kansas and Nebraska drilling program, and expect to drill 30 to 40
wells per year for at least the next two years. In contrast,
our Bakken drilling play is just getting started. In addition
to the Bakken, we are beginning to see the emergence of the highly
prospective Three Forks as a target on our acreage. The
potential this world-class oil play brings to Credo cannot be
overstated, due especially to our prime location in the heart of
the play, where the Company is drilling with some of the country's
largest, most sophisticated oil companies."
About Credo Petroleum
Credo Petroleum Corporation is an independent oil and gas
exploration, development and production company based in Denver,
Colorado. The Company has significant operations in the
Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko
Basin of the Texas Panhandle and northwest Oklahoma, and in
southern Oklahoma. Credo uses advanced technologies to
systematically explore for oil and gas and, through its patented
Calliope Gas Recovery System, to recover additional reserves
from largely depleted gas reservoirs. For more information,
please visit our website at www.credopetroleum.com or contact us at
303-297-2200.
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.
CONTACT: Marlis E. Smith, Jr.
Chief Executive Officer
or
Alford B. Neely
Chief Financial Officer
303-297-2200
Website: www.credopetroleum.com
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