Arcan Resources Ltd. Announces Initial Test Results From Its Ninth and Tenth Horizontal Multi-Stage Fractured Wells and Additional Hedging
CALGARY, ALBERTA, Sep 15, 2010 (Marketwire via COMTEX News Network) --
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Arcan Resources Ltd. (TSX VENTURE:ARN) ("Arcan") is pleased to report initial test results from its ninth and tenth horizontal multi-stage fractured wells in its Swan Hills Beaverhill Lake development program. Arcan also announces that it has entered into further financial oil contracts for a total of 1,000 barrels per day for fiscal 2011 through collars with a $70 floor and a $100 ceiling.
The Swan Hills (2-17) 13-17-68-8W5Hz ("13-17") and (2-17) 6-09-68-8W5Hz ("6-09") Horizontal Multi-Stage Fractured Wells
Arcan's ninth and tenth horizontal multi-stage fractured wells were drilled in the Beaverhill Lake carbonate reservoir, each to a true vertical depth of 2,450 meters with horizontal legs of approximately 1,400 meters for a total measured depth of 4,005 meters. At a depth of 4,005 meters, the wells will be subject to a 5% royalty on the first 90,000 barrels of oil produced. The 13-17 and 6-09 wells were each successfully completed in August, 2010 using 14 separate, 43 cubic meter 28% hydrochloric acid fracture stimulation treatments. Arcan is pleased to announce that the two wells averaged in excess of 650 barrels of oil equivalent per day each of 40 API light sweet oil and associated sweet natural gas over their test periods. The 13-17 and 6-09 wells are the first Arcan wells to have 14 fracture stages over 1,400 meter horizontal legs versus Arcan's previous wells which, in general, have had 10 fracture stages over 1,000 meter horizontal legs. Both wells are on production and tied into Arcan pipeline infrastructure and production facilities.
Arcan has an 81% working interest in the 13-17 well, which is inside the Deer Mountain Unit #2, and a 100% working interest in the 6-09 well, which was drilled on the recently acquired lands to the south of the Deer Mountain Unit #2. The 6-09 well demonstrates the geologic and economic viability of the play trend continuing south onto Arcan's 140 net sections of largely undeveloped continuous land holdings.
Completion operations are ongoing on Arcan's eleventh and twelfth horizontal multi-stage fractured wells in Arcan's Swan Hills Beaverhill Lake development program. Arcan continues to anticipate drilling up to 15 wells in 2010 within its cash flow and bank debt capabilities, as previously outlined in its 2010 capital program.
Hedging Transactions
In addition to the 1000 barrels per day previously hedged for 2011, Arcan has entered into two additional oil hedging transactions. Both of these new transactions consist of the purchase of a $70.00 per barrel Canadian dollar WTI put and the sale of a $100.00 per barrel Canadian dollar WTI call on 500 barrels per day of oil for the period from January 1, 2011 to December 31, 2011, for a total of 1,000 barrels per day. With these additional hedges in place, Arcan now has a total of 2,000 barrels per day hedged for 2011. |
