Exploration & Production | Drilling / Well Results | Forecast - Production

Strategic Turns on Taps at Muskeg Wells; Reaffirms Guidance

Share Print Bookmark    |    Tuesday,October 07,2014

Strategic Oil & Gas Ltd. announces record production levels driven by the Company’s summer Muskeg horizontal drilling program.

Based on field estimates, Strategic’s corporate production rate averaged 4,510 Boe/d (71% oil) for the fourth week of September. New production volumes in the third quarter have been added from five Muskeg wells since the summer drilling program began in June 2014, and a sixth well which was recently fracture stimulated is currently being tied in.

Initial production rates from the last four Muskeg wells are as follows:

Further advancements in the completion program yielded higher oil rates in the latest three Muskeg wells 15-24, 1-25 and 14-23. Production rates for the 2-26 well have increased in recent days as the well continues to clean up.

In the second half of September, a third party sales oil pipeline was impacted by a temporary shut-down affecting all producers shipping through the pipeline. Strategic has not curtailed any production as a result of this event. Strategic immediately implemented measures to mitigate the effect of the pipeline shut-down on crude oil production and sales volumes including the use of rail cars for transportation and shipping volumes to a company-owned storage facility. As a result of implementing these measures the Company put approximately 30,000 barrels of oil in storage. Strategic has resumed shipping crude oil into the pipeline and both the stored volumes and current production are now being delivered to sales.

Guidance

Strategic expects to continue its active capital program through the fourth quarter, drilling up to six new wells. Production for the second half of 2014 is still estimated at 3,800 Boe/d and 2014 exit production guidance is maintained at 4,600 Boe/d.

Gurpreet Sawhney, Strategic’s President and Chief Executive Officer, said: "Though the temporary shut-down of the third party oil pipeline forced us to defer some of our oil sales volumes to the fourth quarter, we did not have to curtail any production operations as a result of this event. We continue to increase well performance and gain efficiencies, and our September exit production of 4,510 Boe/d was a Company record."