Key Wells

Strata-X Reports Results of Lingle Step-Out Well

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   |    Tuesday,September 22,2015

Strata-X Energy Ltd. has reported the results of its latest Lingle step-out well.

Highlights:

• The 8-mile step-out vertical pilot well encountered approximately 16 feet of Lingle formation reservoir as anticipated.
• Reservoir pressure was 2 times the reservoir pressure of the initial Burkett 5-34 well where the 1800 foot lateral test well reached over 300 BOPD.
• A drill stem test (DST) recovered oil and gas with third party analysis similar to the DST analysis of the Burkett 5-34 vertical pilot hole.
• Kuhlig #1 site confirmed as candidate for future horizontal well.

Well Update

The Company reports that the Kuhlig #1 well has reached a total depth of 4,850 feet and the logging and drill stem testing (DST) program has been completed.⁽¹⁾

The well encountered approximately 16 feet of reservoir consistent with the mapping and a historic well located approximately 4,000 feet away. A reservoir pressure of 2,100 psi was indicated during a drill stem test of the targeted formation.⁽¹⁾ This pressure is double that of the initial pressure in the Burkett 5-34 lateral well which reached over 300 BOPD. As expected, small amounts of oil and gas were recovered during the drill stem test ("DST") of the Kuhlig #1 well which is interpreted as a tight carbonate Lingle reservoir.⁽¹⁾

The transient pressure analysis of the DST by a third party expert indicates an oil reservoir with a solution gas drive. This analysis is consistent with DST analysis on the Burkett 5-34 vertical pilot hole. The analysis does indicate that the reservoir is tighter at the Kuhlig #1 location compared with the Burkett 5-34 well. The DST expert has indicated that this location would be a good candidate for a fracture stimulated horizontal well in the Lingle.

In summary, the following was achieved in this well:

• The reservoir pressure was double that of our initial test well at Burkett 5-34 lateral.
• The 16 feet of reservoir is the same thickness as the Lingle reservoir in a historic well located about 4000 feet away. The trajectory of the planned 4000 foot lateral well is between these two wells.
• The Kuhlig #1 proved oil in an 8 mile step-out. The recovery of oil cut mud on the DST was similar to DST results in the Burkett-5-34 vertical pilot hole.

Tim Hoops, the Company's President, stated, "The Kuhlig #1 test well has certainly advanced our understanding of the Lingle play. Strata-X's preliminary assessment of the results from this pilot well is that a multistage 4000 foot lateral well through the Lingle formation over a trajectory between the two vertical wells should have 16 feet of reservoir and perform much better than our first Lingle lateral test at Burkett 5-34 eight miles away. The expected improvement is due primarily to the thicker and much higher pressured Lingle reservoir over a longer length of lateral."

The Kuhlig #1 well is being completed as a future water disposal well for the multistage stimulated lateral well planned for in early 2016. This lateral well will incorporate a superior completion design to that of the Burkett 5-34 and will use rotary steering designed to reduce the drilling costs.