Dec. 18 - NER.TSE - FAVOURABLE DRILL RESULTS
From: Subject 17869
TORONTO, Dec. 18 /CNW/ - Newstar Resources announces that it has drilled 67 wells since May 1, 1997 of which 12 have
been dry holes. Newstar anticipates that its 1997 exit production rate will
exceed 5,000 BOED.
Michigan Prairie du Chien (PdC) Program
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In the Pinconning PdC Field, Newstar continues to produce its 96% owned
State Geno 1-18 at rates of 3.5 Mmcf of gas and 350 barrels of condensate per
day from the PdC at 12,000 feet. The Company's recently completed Garbulinski
1-11 well in which it owns a 100% interest is now producing at rates
comparable to or exceeding those of the State Geno 1-18. The Company is in the
process of completing its State Fraser 2-18 well (87.5% interest), the highest
well on the structure. This well is expected to produce at rates comparable to
the State Geno and Garbulinski wells. The 94% owned Powers well is currently
being drilled and the 100% owned Metz 1-15 well will be deviated to a higher
point on the structure in the first quarter of 1998.
Ohio
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In Ohio, success rates, production levels, and the Company's average
working interest are all exceeding projections. Since late April, Newstar has
drilled 39 wells, of which 5 have been dry holes.
Michigan Niagaran Pinnacle Reef Program
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Newstar's Niagaran reef program includes horizontal wells in existing
reservoirs, exploratory projects delineated by 3-D and 2-D seismic, and
enhanced oil recovery (EOR) through the injection of CO2 in known reservoirs.
Since May, the Company has completed 6 successful horizontal wells. In its
exploratory program, Newstar has drilled 4 successful wells. On average, wells
are producing in excess of 100 BOPD.
Newstar has an 8% interest in an EOR joint venture which is performing
above projections with one reef fully pressured and producing in excess of
1,000 BOPD. At least four other reefs will be part of this program; one of
which is currently being pressured with a view to production in the first
quarter of 1998.
Newstar plans to drill Niagaran Pinnacle Reef targets under Lake Michigan
from onshore locations in the first quarter of 1998. The outcome of the
environmental review which delayed this project has been favourable.
Michigan Devonian Program
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Newstar continues to exploit Michigan's old Devonian fields through the
use of horizontal drilling techniques. In the course of drilling horizontal
wells in Newstar's Porter Field, three previously untested zones were
discovered, one of which tested at rates exceeding 300 barrels of oil per day.
These new zones can be initially exploited with vertical drilling, enabling
the Company to expand and accelerate its program. This program has proceeded
more slowly than anticipated because of permitting issues which have now been
largely resolved.
Madisonville
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In its 100% owned Madisonville Field holdings in East Texas, Newstar is
presently acquiring equipment and permitting a gas plant to process gas from
its shut-in No.1 Magness well which would allow the well to be put in
production in the summer of 1998. The No.1 Magness tested gas from the Rodessa
formation at 12,000 feet at an absolute open flow rate of 103 Mmcf per day.
Newstar has also scheduled a 3-D seismic survey to be acquired in early
1998 to more fully delineate the Cotton Valley formation sitting at 17,000
feet. Initial seismic interpretation indicates that this formation has the
possibility of holding a substantial natural gas deposit. Drilling a well to
test the Cotton Valley is expected to begin after the 3D seismic is processed.
Louisiana
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A well on the East North Maurice prospect in Lafayette Parish, Louisiana
is presently at a depth of approximately 10,000 feet. This well is located in
a field which has cumulative production to date of 180 bcf of natural gas and
10 million barrels of condensate. The well is being drilled to test the Bol
Mex Sand formation at a depth of 15,600 feet. The well is expected to reach
target depth in January, 1998. Newstar's interest in the well is 7.5%.
Newstar holds a 25% interest in 3,000 acres which make up the South
Lakeside Prospect located in Cameron Parish, Louisiana. Situated on the
prospect is a well drilled in the second quarter of 1997 which confirmed the
presence of a large subsurface structure, but cut an unexpected fault as it
approached TD. On the basis of 2D and 3D seismic, Newstar and its partners
plan to re-enter and sidetrack this well to further test the potentially gas
bearing Miogyp formation at a depth of approximately 17,500 feet.
Michigan-based Newstar Resources Inc. is an oil and gas exploration and
production company with operations in Michigan, Ohio and Texas.
Certain statements in this news release regarding future expectations of
reserve potential, production and drilling may be regarded as
''forward-looking statements'' within the meaning of the U.S. Litigation
Reform Act. They are subject to various risks, such as the inherent
uncertainties in interpreting engineering data relating to underground
accumulations of oil and gas. Actual results may vary materially.
For further information: TIM RICHARDSON, (416) 360-7415 OR 1-800-363-0632 |
