At last some updates.
AMAROK ENERGY INC. UPDATE ON OPERATIONS AND STRATEGIC DIRECTION
Amarok Energy Inc. has provided an update on its current operations and strategic direction.
Operations update
Amarok recently drilled two wells (1.0 net) and recompleted one well (0.5 net) in Wyoming.
The first well drilled was the Lake Creek 21 well. The total estimated cost of the well based on the authorization for expenditures from the operator is $1.23-million (U.S.) ($620,000 (U.S.) net). The well was on production as of Jan. 20, 2014. Based on preliminary field estimates provided by the operator, the Lake Creek 21 well had initial production of approximately 50 barrels of oil per day and has produced at a rate of 39 barrels per day (19.0 net) of 27-degree API asphaltic sour crude at a 20-per-cent oil cut, over the first 20 days. The production is coming from the Upper Tensleep zones using a conventional pumping unit. The operator is reviewing the possibility of increasing production from the well through the activation of a Lower Tensleep zone, as well as switching to an electric submersible pump.
The second well drilled was the Lake Creek 22A well. The total estimated cost of the well based on the AFEs from the operator is $1.66-million (U.S.) ($830,000 (U.S.) net), which also includes a sidetracking operation. The recompletion operation was completed on the Zimmerman Butte 6 well. The total estimated cost of the operation based on the AFE from the operator is $354,500 (U.S.) ($177,250 (U.S.) net).
Completion reports for the Lake Creek 22A and the Zimmerman Butte 6 wells are being reviewed by Amarok at this time, and the test results will be publicly released in the near future, once analyzed. The operator expects these wells to be on production in March, 2014, subject to power being installed on location.
The total net production to the corporation from its Wyoming assets averaged approximately 39 barrels per day in January, 2014, and is currently approximately 45 barrels per day at a 1-per-cent-level oil cut based on Feb. 7, 2014, field estimates provided by the operator. The foregoing does not include any production from the Lake Creek 22A well and the Zimmerman Butte 6 well. The production levels are expected to vary significantly over the next few months as wells are shut in for testing and placing the new wells on full production.
The corporation previously announced that it planned to drill a well in Montana, United States, in early first quarter 2014, whereby Amarok would earn a 50-per-cent working interest in approximately 37,000 gross acres (18,500 net). The corporation determined not to commence drilling the well by the Jan. 31, 2014, deadline. Based on further technical review and a significant increase in estimated well costs, it was determined not to negotiate a further extension of the agreement to earn an interest in the property.
Amarok estimates that its current cash balance, net of currently anticipated capital commitments, is approximately $15.5-million. To date approximately $4.3-million has been allocated to Wyoming through Amarok's previously announced asset acquisition, and recent drilling and recompletion operations, as well as $1.6-million on other projects including the foregoing Montana farm-in opportunity, due diligence operations in Belize and land leases acquired in Montana.
Strategic direction
Amarok is pleased to announce that Dennis Nerland, QC, has been appointed as president and chief executive officer of Amarok, on an interim basis, pending the completion of a search for a new CEO.
Amarok's vice-president of finance and chief financial officer, Murray Hinz, has advised that he will be resigning effective as of Feb. 15, 2014. Amarok would like to thank Mr. Hinz for his service.
Amarok expects to continue operations as previously announced in Wyoming, and review its commitments regarding existing properties and will continue to search for new oil and gas opportunities in North America along with a management team.
© 2014 Canjex Publishing Ltd. All rights reserved.
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