20 Feb 2013 07:00
NORTHCOTE ENERGY LIMITED - Operations UpdateNORTHCOTE ENERGY LIMITED - Operations Update
PR Newswire
London, February 19
20 February 2013
Northcote Energy Ltd (`Northcote' or `the Company') Operations UpdateNorthcote (AIM: NCT), the listed onshore US oil and gas exploration andproduction company, is pleased to provide a positive update on its operationsin Oklahoma, where it produces from the proven Mississippi Lime and Laytonformations.
Update
* Preparation for fracture stimulation programme on Horizon Project proceeding according to plan with the first frac expected to begin late February/early March 2013; * Acquired a 3.125% working interest in the Bird Creek Prospect in Osage County. The project comprises 800 gross acres and the drilling programme will initially target the Bartlesville Sand. Northcote expects to participate in two wells, the Bray #1 and the Keese #1 in the first half of 2013; * Elected to participate in the deepening of the Burkhart # 1 well on its Horizon Project acreage. This well, was originally drilled to and produced from the Mississippi Chat formation and will be further deepened to evaluate the Mississippi Lime, Wilcox and Arbuckle formations. Northcote has a 3.69% working interest in the well; * Busse and Bouziden wells in Woods County are in process of being tied in to gas sales lines and the Company expects to be able to announce initial production rates from both wells in due course.Northcote's Chief Executive Officer Randy Connally said, "Northcote's HorizonProject assets currently produce from two pay zones and by participating in theBurkhart #1, we will gain exposure to additional zones. The presence ofmultiple pay zones in many areas of Oklahoma is one of the reasons the statehas historically, and continues to be, one of the most prolific oil and gasproducing states in the U.S. Exploiting the entire well bore to leverageexisting investment and generate returns from other objectives, whereeconomically justified, is a core part of our strategy to maximise returns andgenerate internal cash flow to help fund our higher impact Mississippianprojects.
"Additionally, taking small interests in new prospects, as we have done in theBird Creek Project, with an eye toward increasing our interest as the prospectis de-risked is an important part of our growth strategy. We plan to continueto participate in new wells, which are not part of our current lease andreserve base, when we have confidence that low cost incremental production hasa high likelihood of success.
"At listing our net reserves were assigned a P1 PV10 of US$33.8 million by ourcompetent person. Since then, having exercised the option to materiallyincrease our average working interest in the Horizon Project, Osage County,this has increased and our participation in these new wells, alongside ourfracture stimulation programme, provides us with confidence that we are oncourse to further increase our net production and net reserves by the end ofthe year."
Horizon Project, Osage County
Northcote has elected to participate in the deepening of the Burkhart # 1 well(`the Well') on the Horizon Project to evaluate the proven Mississippi Lime,Wilcox and Arbuckle formations. Originally, the Well was drilled to andproduced from the Mississippi Chat formation. Northcote has a 3.69% workinginterest in the Well, and as a result drilling and completion costs areexpected to approximate US$15,000 net to Northcote's working interest.
Preparation for the fracture stimulation on two existing horizontal wells onthe Horizon Project is proceeding according to plan. The first frac is expectedto commence in late February/ early March 2013. As part of its strategy tosignificantly increase production, Northcote intends to utilise hydraulicfracturing techniques in relation to the unfracked horizontal wells on theProject. Hydraulic fracturing is the primary choice for enhancing production,and typically has the effect of increasing productivity 2 to 30 times comparedto an untreated well, by increasing the amount of contact that the well borehas with high quality reservoir rock. Northcote's average working interest inthe 10 wells currently producing in the Horizon Project is 37.5%.
Bird Creek Project, Osage County
The Company has acquired a 3.125% working interest in the 800 gross acres, BirdCreek Prospect which has near term production potential. Northcote expects toparticipate in two wells, the Bray #1 and the Keese #1 in H1 2013. Both wellswill initially be targeting the Bartlesville Sand formation. The combined costof drilling both wells net to Northcote's working interest is estimated atUS$30,000.
DeAgua Project, Woods County
The Busse and Bouziden wells in the DeAgua Project are in the process of beingtied in to gas sales lines. Initial production rates for both wells areexpected shortly.
**ENDS**For further information, visit www.northcoteenergy.com, or contact:
Randy Connally Northcote Energy Ltd +01 214 675 7579Ross Warner Northcote Energy Ltd +44 7760 487 769Dan Jorgensen Northcote Energy Ltd +44 (0) 20 7024 8395Roland Cornish Beaumont Cornish Ltd +44 (0) 20 7628 3396James Biddle Beaumont Cornish Ltd +44 (0) 20 7628 3396Jerry Keen Shore Capital Stockbrokers +44 (0) 20 7408 4090 LimitedBidhi Bhoma Shore Capital Stockbrokers +44 (0) 20 7408 4090 LimitedHugo de Salis St Brides Media and Finance +44 (0) 20 7236 1177 LtdElisabeth Cowell St Brides Media and Finance +44 (0) 20 7236 1177 LtdNotes:Northcote Energy Ltd is a revenue generative US onshore oil and gas productioncompany focussed on the rapidly emerging Mississippi Lime formation inOklahoma. The Company participates with leading operators, including MidstatesPetroleum and Chesapeake Energy, in low risk development plays where advancedtechniques, such as horizontal drilling and fracking, are used to unlock knownoil accumulations and dramatically improve recovery rates. Management isfocused on increasing production through a multi-well drilling and frackingcampaign in 2013.