Torquay Provides Operations UpdateApril 1, 2011
CALGARY, ALBERTA–(Marketwire – April 1, 2011) –
THIS NEWS RELEASE IS NOT FOR DISSEMINATION OR DISTRIBUTION IN THE UNITED STATES, TO UNITED STATES NEWS WIRE SERVICES OR TO UNITED STATES PERSONS.
Torquay Oil Corp. (TSX VENTURE:TOC.A)(TSX VENTURE:TOC.B) (“Torquay” or the “Company”) is pleased to provide an update on its operating activities in southeast Saskatchewan.
-- Closed a property acquisition in southeast Saskatchewan for a total purchase price of $4,724,000.00: Added 50 bopd and P+P reserves of approximately 456,000 barrels of light oil. -- Acquired a partner's working interest in the Lake Alma area. -- Defined over 40 conventional, Mississippian, light oil drilling locations (2 year inventory). -- Currently producing approximately 510 boepd. -- Implementing our 3rd Generation fracture program at Lake Alma to further improve long term deliverability of the Bakken discovery.
Lake Alma, SE Saskatchewan
The exploratory Lake Alma Bakken horizontal well at 13-9-2-17W2 was placed on production December 4, 2010 at an initial production rate of 80 bopd with associated gas of 85 mcf/d. The Company has recently completed an individual frac stage evaluation and determined that only 6 stages are contributing oil. Average production from the well over the last 30 days was 45 bopd. The Company is optimizing the well to enhance oil production from an additional 4 stages. Management is using these encouraging results to further enhance the Company’s frac program with respect to the type of frac fluid, liner design, feed rates and sand concentrations.
Torquay has received well licenses for two wells which are expected to be drilled after spring breakup. One well (0.6 net) has been identified on 3D seismic and will target the Ratcliffe formation after oil was encountered in that zone while drilling the 13-9-2-17W2 Bakken well. The second well (1.0 net) is a development well targeting the Bakken and is located one mile west of our producing Bakken discovery well at 13-19-1-17W2.
Torquay has acquired the entire working interest ownership of an industry partner in the Lake Alma lands. Torquay now holds 57,640 gross acres (55,080 net acres) in a contiguous block of land at Lake Alma. The Company believes that the Lake Alma land block will provide a large inventory of development and exploratory drilling locations targeting the Ratcliffe, Bakken, Birdbear, Red River and Yeoman formations over the next 5 years.
Torquay has completed the permitting phase of a 230 square kilometer 3D seismic program covering the western portion of the Lake Alma land block. This seismic is expected to be shot during summer 2011. The Company currently has access to 220 square kilometers of 3D seismic data over the eastern Lake Alma land block. This new shoot will give Torquay complete 3D coverage over the entire land block.
Torquay’s sixth Bakken well, drilled off the northwest corner of the Lake Alma land block in January 2011, earned a 100% working interest in an additional 3.75 sections of land prospective for both Bakken and Ratcliffe zones. This well was determined to be uneconomic and will be abandoned.
Viewfield, SE Saskatchewan
During Q1, 2011 Torquay completed a 3D seismic survey over Company lands held at Viewfield. The Viewfield 3D has increased the Company’s drilling inventory at Viewfield to 12 locations. The Company has recently drilled and completed two new Frobisher wells which were brought on production in late March. The Company plans to drill an additional four wells after breakup. Torquay is also undertaking a battery expansion at Viewfield to handle the increased volumes from existing and future production.
Midale, SE Saskatchewan
Torquay purchased a 300 acre parcel in the Midale area of SE Saskatchewan where it has identified up to eight, low risk, drilling locations. The Company is proceeding to license the wells over spring break-up and plans to drill the first well in Q3, 2011. Midale is approximately 10 miles south of Torquay’s Viewfield core area, allowing for operating synergies.
Willmar, SE Saskatchewan
A 33 square kilometer 3D seismic program was completed at Willmar in January, 2011. Based on Torquay’s interpretation of the seismic, several anomalies have been identified. The Company has drilled a vertical well targeting the Frobisher-Alida Beds, which has been completed and is currently being evaluated. A second well is planned to be drilled immediately following spring breakup. Torquay now holds approximately six contiguous sections (3,840 acres) through freehold leasing and seismic option agreements in the Willmar area.
Additional Property Acquisitions, SE Saskatchewan
Torquay has recently acquired producing properties in the Alameda, Union Jack and Queensdale areas of southeast Saskatchewan. These properties are currently producing 70 bopd gross (50 bopd net). A total of 4,375 gross acres (3,480 net) have been acquired. Torquay has identified eight, low risk, drilling locations targeting light oil in the Midale and Alida formations as well as a number of workover and recompletion candidates. The acquired properties add Proved Developed reserves of 147,200 bbls for the Alameda and Union Jack properties (based on an evaluation by McDaniel & Associates Consultants Ltd. effective, December 31, 2010) and 13,000 bbls for the Queensdale property (based on an internal evaluation effective, March 1, 2011) and Total Proved plus Probable reserves of 456,800 bbls.
Torquay’s operating line of credit has been increased from $3.0 million to $9.65 million. No amount has been drawn on the line of credit at this time. Torquay has a capital expenditure program of $40.0 million planned for 2011. The capital expenditure program may be increased for 2011 based on opportunities currently available to the Company.
Torquay is a uniquely positioned, oil focused, junior exploration company formed to generate and develop its own prospects, acquire oil-weighted properties and participate with joint venture partners in oil exploration and development in the Western Canadian Sedimentary Basin. The Company’s Class A Shares and Class B Shares trade on the TSX Venture Exchange under the symbols TOC.A and TOC.B. The Company currently has 35,299,572 Class A Shares and 1,260,000 Class B Shares outstanding.
FORWARD LOOKING STATEMENTS:
This news release contains forward-looking statements and forward-looking information (collectively “forward looking information”) within the meaning of applicable securities laws. Forward-looking information typically use words such as “anticipate”, “believe”, “project”, “expect”, “goal”, “plan”, “intend” or similar words suggesting future outcomes, statements that actions, events or conditions “may”, “would”, “could” or “will” be taken or occur in the future. In particular, forward looking information in this news release includes, but is not limited to: statements with respect to, drilling, completion, seismic and facility plans, capital expenditures and the expected results from operations. The forward-looking information is based on certain key expectations and assumptions made by Torquay, including expectations and assumptions concerning prevailing commodity prices, exchange rates, interest rates, applicable royalty rates and tax laws; future well production rates and estimates of operating costs; reserve and resource volumes; the state of the economy and the exploration and production business; business prospects and opportunities; the availability and cost of financing, labour and services; the impact of increasing competition; ability to market oil and natural gas successfully and the ability of the Company to access capital. Although Torquay believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Torquay can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, results from operations will not meet with expectations and risks associated with the oil and gas industry generally. Additional information on the foregoing risks and other factors that could affect Torquay’ operations and financial results are included in Torquay’s annual information form and other reports on file with Canadian securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com). The forward-looking statements contained in this news release are made as of the date hereof and Torquay undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The term BOE may be misleading, particularly if used in isolation. A BOE conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not necessarily represent a value equivalency at the wellhead.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Torquay Oil Corp.
Mr. Brent McKercher
President & Chief Executive Officer
403 233 2444 ext. 30
Fax: 403 262 6991
Torquay Oil Corp.
Mr. Darwin Little
Vice President, Finance & Chief Financial Officer
403 233 2444 ext. 31
Fax: 403 262 6991
INDUSTRY: Energy and Utilities – Oil and Gas