Strata-X Reports Oil Flow on Burkett 5-34HOR, Vail Oil Project
DENVER, COLORADO and BRISBANE, QUEENSLAND and VANCOUVER, BRITISH
COLUMBIA--(Marketwired - May 22, 2014) - The directors and
management of Strata-X Energy Ltd. ("Strata-X" or the "Company")
(TSX-VENTURE:SXE)(ASX:SXA) are pleased to announce that, following
the successful stimulation of the Burkett 5-34HOR horizontal well
("Well") on the Vail Oil Project, the Well flowed back
approximately 116 barrels ("bbl") of light-gravity oil along with
2,100 bbls of completion fluid and formation water over a 30-hour
time period on a 20/64 choke. At the end of the 30 hour period the
well ceased to flow on its own, a standard flowback occurrence. The
Well has subsequently been shut in, pending the arrival of a
workover rig to conduct a swab test.
The flowback duration was assisted by the energized nitrogen
that was injected during the completion stimulation. Approximately
2,000 bbls of completion fluid remains to be recovered during the
swabbing operations. The volumes reported herein are measured
quantities taken by gauging the flowback tanks and are estimates. A
completion rig has been sourced and is expected to be rigged up and
swabbing by early next week, pending road restrictions due to the
US holidays. The Company anticipates it may be necessary to swab
test the well for 10-14 days to determine the flow capacity of the
well and fluid content. Information obtained during the swab test
will be used to design permanent production facilities. Following
the swab test, construction of surface facilities and installation
of a down-hole pump will commence in anticipation of a long term
production test.
President and Managing Director Tim Hoops stated: "We were
pleased to see the flowback for 30 hours, as this was longer than
we anticipated. It is too early yet to determine what the well will
make on pump and what the composition of the fluid will be, but we
are definitely encouraged. This is an important step for the
Company towards our goal of proving substantial light oil reserves
in one of our Illinois Basin projects. At the start of the project,
several risk factors needed to be evaluated, including oil
saturations, reservoir properties and engineering aspects. We have
de-risked most of these factors and now with a better understanding
of this reservoir believe we can manage the remaining risks on
achieving commercial production of the 338 million barrels of PIIP
in the Middle Devonian as estimated by our reservoir engineering
consultants Chapman Engineering." (Unrisked PIIP, projects are not
sufficiently developed to assign Contingent Resources or Petroleum
Reserves to the Project, Qualified Engineers arrived at this PIIP
figure after completing an analysis of the available technical data
including the geological and geophysical interpretation presented
to them by Strata-X, information from relevant nearby wells or
analogous reservoirs and the proposed program for the project). See
footnote, DS-1, DS-3
Assuming early positive results of the production test of
Burkett 5-34HOR, the Company has a second location permitted and
ready to drill called Raccoon Creek-1 which is located
approximately eight miles away.
In July 2013, Strata-X spudded the Burkett 5-34HOR well, the
first Company test well of the Vail Oil Project. It was designed to
be drilled in two stages. First, the Company drilled a vertical
hole to the top of the target formation and then cored
approximately 60 feet of the formation. The vertical portion of the
well reached a total depth of 4,730 feet. Oil and gas shows were
encountered in the targeted Devonian Lingle carbonate formation and
a drill stem test of the target recovered gas- and oil-cut mud. The
Burkett 5-34 HOR well is located in Clay County, Illinois USA and
is comprised of an 80 acres production unit covering approximately
5 exploration leases with Strata-X retaining a 100% working
interest in the Well. The Well flowed back on a 20/64 choke after a
nitrogen assisted completion stimulation consisting of 7 stage
intervals using an approximate total of 176,000 pounds of
proppant.
Strata-X has 100% of 72,000 net acres in the Illinois Basin.
For more information on the Company please review the "May 2014
Update on Key USA Projects" available on the Company's website at
www.strata-x.com
About Strata-X
Strata-X is a Denver, Colorado (USA) based company and is
engaged in the business of oil and gas exploration and development
with a variety of exploration opportunities in North Dakota,
California, Colorado, Texas, Illinois and Western Australia and
production and development opportunities in California. Strata-X
has 139,785,415 common shares outstanding and trades under the
symbol "SXE" on the TSX-V and "SXA" on the ASX.
Disclaimer
PIIP figures are from reports prepared by Chapman Petroleum
Engineers Ltd (April 2014) and AWT (Strata-X prospectus 2013)
following analysis of the available technical data including the
geological and geophysical interpretation presented to them by
Strata-X, information from relevant nearby wells or analogous
reservoirs and the proposed program for the project.
DS-1 The information in this presentation that relates to
Petroleum Reserves/Prospective Resources/Contingent Resources that
was prepared and published by AWT International dated 18 December
2012 and published in Strata-X Energy Ltd's "Prospectus 2013"
(available online at www.strata-x.com) as part of the Companies
2013 Australia Securities Exchange Initial Public Offering and is
based on, and fairly represents, information and supporting
documentation prepared by, or under the supervision of Doug
Barrenger ("JORC Competent Person"), employed by AWT International
and is independent of Strata-X Energy Ltd. At the time of the
Prospectus 2013 issuance Doug Barrenger was an employee of AWT
International and a member of the Exploration Society of Australia
(PESA) amongst other professional petroleum organisations. AWT
International consents to the inclusion of this information in this
document. As of the issuance of this document Strata-X Energy Ltd
management is not aware of any material information that would
change the results of the AWT International report as published in
the Prospectus 2013. Figures shown reflect Strata-X's economic
interest (US Dollars) net of royalty or other burdens and were
generated, using the deterministic method. The estimated quantities
of petroleum that may potentially be recovered by the application
of a future development project(s) relate to undiscovered
accumulations. These estimates have both an associated risk of
discovery and a risk of development. Further exploration appraisal
and evaluation is required to determine the existence of a
significant quantity of potentially moveable hydrocarbons.
DS-3 The information in this presentation that relates to
Petroleum Reserves/Prospective Resources/Contingent Resources that
was prepared and published by Chapman Petroleum Engineers Ltd. and
dated 1 April 2014 and published on Strata-X Energy Ltd's website
in a News Release dated 8 May 2014 to meet the Company's ongoing
disclosure requirements (available online at www.strata-x.com), and
fairly represents, information and supporting documentation
prepared by, or under the supervision of Charles Moore, employed by
Chapman Petroleum Engineers Ltd. and is independent of Strata-X
Energy Ltd. At the time of the Chapman Petroleum Engineers Ltd.
report dated 1 April 2014, Charles Moore was an employee of Chapman
Petroleum Engineers Ltd. and a registered Professional Engineer in
the Province of Alberta, Canada amongst other professional
petroleum organisations. Chapman Petroleum Engineers Ltd. and
Charles Moore consent to the inclusion of this information in this
document. As of the issuance of this document, Strata-X Energy Ltd
management is not aware of any material information that would
change the results of the Chapman Petroleum Engineers Ltd. report
as published in the this presentation. There is no certainty that
stated resources will be commercially viable to produce any portion
of the resources. The Report reviewed only Prospective Resources as
the project is not sufficiently developed to assign Contingent
Resources or Petroleum Reserves to it, further, all Petroleum
Initially in Place figures relate to undiscovered quantities. The
estimated quantities of petroleum that may potentially be recovered
by the application of a future development project(s) relate to
undiscovered accumulations. These estimates have both an associated
risk of discovery and a risk of development. Further exploration
appraisal and evaluation is required to determine the existence of
a significant quantity of potentially moveable hydrocarbons.
Strata-X Energy Ltd management is not aware of any material
information that would change the results of the Chapman Petroleum
Engineers Ltd. report as published in the this presentation.
This announcement was made in Canada for the TSX.V and in
Australia for the ASX.
Public documents for Strata-X Energy Ltd. can be found at
SEDAR (Canada) (www.sedar.com) and ASX.com.au (Australia).
By definition of the COGE Handbook - "Undiscovered resources
are those quantities of oil and gas estimated on a given date to be
contained in accumulations yet to be discovered." The Handbook
further states - Caution (per NI 51-101/5.9(2)(v)(B)) - "There is
no certainty that any portion of the resources will be discovered.
If discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources." In addition, per
NI 51-101/5.6 "the estimated values disclosed do not represent fair
market value."
CAUTIONARY STATEMENTS
This news release contains forward-looking statements, which
relate to future events or future performance and reflect
management's current expectations and assumptions. The use of any
of the words "anticipate," "continue," "estimate," "expect," "may,"
"will," "project," "should," 'believe," and similar expressions is
intended to identify forward-looking statements. Such
forward-looking statements reflect management's current beliefs and
are based on assumptions made by and information currently
available to the Company. Readers are cautioned that these
forward-looking statements are neither promises nor guarantees, and
are subject to risks and uncertainties that may cause future
results to differ materially from those expected and the
forward-looking statements included in this news release should not
be unduly relied upon. See "Risks and Uncertainties" in the
Company's Filing Statement dated August 30, 2011, available on
SEDAR at www.sedar.com. These forward-looking statements are made
as of the date hereof and the Company does not assume any
obligation to update or revise them to reflect new events or
circumstances save as required under applicable securities
legislation. This news release does not constitute an offer to sell
securities and the Company is not soliciting an offer to buy
securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of such jurisdiction.
Neither 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.
Tim Hoops (USA)President+1 855-463-2400info@strata-x.comColin
Christensen (Canada)Investor Relations+1
403-483-8363colin@strata-x.comDuncan Cornish (Australia)Corporate
Secretary+61 7 3212-6299dcornish@strata-x.com
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