Rock Energy Inc. Announces Operations Update for Q4 2013
CALGARY, ALBERTA -- (Marketwired) -- 01/20/14 -- Rock Energy Inc.
(TSX: RE) ("Rock" or the "Company") is pleased to report its
operating results for the three months ended December 31, 2013. Rock
is a Calgary-based crude oil exploration, development and production
Production and Operations
During Q4 2013, Rock's daily sales averaged approximately 4,000 boepd
(92% oil & liquids) and the Company estimates production for the year
ended 2013 to have averaged approximately 3,500 boepd (90% oil and
liquids). Production for the quarter was temporarily affected as
producing oil wells were shut in during the drilling of horizontal
wells at both Mantario and Onward. Those wells have been restarted
and Rock is currently producing over 4,500 boepd. Production at the
Mantario field is presently exceeding 3,000 bopd including 175 - 200
bopd from each of the new horizontal wells.
During the quarter, Rock drilled a total of 16 (16.0 net) oil wells
and 2 (2.0 net) dry and abandoned wells. At Mantario the Company
drilled 3 (3.0 net) vertical step out oil wells, 2 (2.0 net)
horizontal oil wells and 1 (1.0 net) exploration well which was dry
and abandoned. At Onward the company drilled an additional 8 (8.0
net) horizontal Viking oil wells and 2 (2.0 net heavy oil exploration
wells (1 successful Lloydminster Formation new pool discovery, and 1
dry and abandoned location). The Company also drilled 2 (2.0 net)
successful oil wells in the Plains region during the quarter.
For the year ended December 31, 2013, the Company drilled a total of
46 (45.0 net) wells made up of 10 (10.0 net) oil wells, 31 (30.0 net)
heavy oil wells, 1 (1.0 net) service well and 4 (4.0 net) dry and
abandoned wells, for an overall net casing success rate of 91%.
Viking Light Oil Resource Play at Onward
Of the 8 horizontal Viking wells drilled in the fourth quarter, 5
were completed and put on production before the end of the year.
Those 5 wells have experienced production rates over the first 30
days ranging from 45 bopd to 60 bopd, averaging 50 bopd. The
remaining 3 wells have since been completed and brought on production
and are experiencing initial production characteristics similar to
the first five. Rock continues to refine the completion techniques of
these wells and has noted an improvement in the production rates from
the first 2 wells drilled by the company in the third quarter.
In management's opinion, the activity to date has begun to de-risk
our lands with an economically viable Viking light oil resource play
on 8.5 of our 38.5 sections of land. Currently, Rock is producing
approximately 250 bopd of light Viking oil from the first 7 wells in
this area (including the 2 wells drilled in September). The Company
plans to continue to de-risk the resource on the remaining 30
sections to determine the full potential of this play.
During the first quarter of 2014, Rock plans to drill an additional 7
(7.0 net) horizontal wells in the Viking play at Onward, and 4 (4.0
net) additional 40 acre step out locations at Mantario (as of this
date, 3 (3.0 net) of the Mantario wells have been drilled and cased
as successful oil wells). This additional drilling activity will
allow the Company to de-risk another 6 sections of land at Onward,
and continue to determine the extent of the pool at Mantario.
For the remainder of 2014, Rock will continue to develop the Mantario
pool including the construction of the infrastructure to allow for
the water/chemical flood, de-risk the resource play at Onward and
execute an active exploration program.
Advisory Regarding Forward-Looking Information and Statements
This press release contains forward-looking statements and
forward-looking information within the meaning of applicable
securities laws. The use of any of the words "will", "expects",
"believe", "plans", "potential" and similar expressions are intended
to identify forward-looking statements or information. More
particularly and without limitation, this press release contains
forward looking statements and information concerning Rock's
expectation of average production, including average production
sales, and future drilling and development under its capital program.
The forward-looking statements and information in this press release
are based on certain key expectations and assumptions made by Rock,
including prevailing commodity prices and exchange rates; applicable
royalty rates and tax laws; future well production rates; the
performance of existing wells; the success obtained in drilling new
wells; the sufficiency of budgeted capital expenditures in carrying
out planned activities; the availability and cost of labour and
services; and the receipt, in a timely manner, of regulatory and
other required approvals. Although Rock believes that the
expectations and assumptions on which such forward-looking statements
and information are based are reasonable, undue reliance should not
be placed on the forward-looking statements and information because
Rock can give no assurance that they will prove to be correct. There
is no certainty that Rock will achieve commercially viable production
from its undeveloped lands and prospects.
Since forward-looking statements and information address future
events and conditions, by their very nature they involve inherent
risks and uncertainties. Actual results could differ materially from
those currently anticipated due to a number of factors and risks.
These include, but are not limited to, the risks associated with the
oil and natural gas industry in general, such as: operational risks
in development, exploration and production; delays or changes in
plans with respect to exploration or development projects or capital
expenditures; the uncertainty of reserve estimates; the uncertainty
of estimates and projections relating to reserves, production, costs
and expenses; health, safety and environmental risks; commodity price
and exchange rate fluctuations; marketing and transportation of
petroleum and natural gas and loss of markets; environmental risks;
competition; incorrect assessment of the value of acquisitions;
failure to realize the anticipated benefits of acquisitions; ability
to access sufficient capital from internal and external sources;
stock market volatility; and changes in legislation, including but
not limited to tax laws, royalty rates and environmental regulations.
In this press release, the Corporation has adopted a standard for
converting thousands of cubic feet ("mcf") of natural gas to barrels
of oil equivalent ("boe") of 6 mcf : 1 boe. Use of boes may be
misleading, particularly if used in isolation. The boe rate is based
on an energy equivalent conversion method primarily applicable at the
burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different than
the energy equivalent of the 6:1 conversion ratio, utilizing the 6:1
conversion ratio may be misleading as an indication of value.
Readers are cautioned that the foregoing list of factors is not
exhaustive. Additional information on these and other factors that
could affect the operations or financial results of Rock are included
in reports on file with applicable securities regulatory authorities
and may be accessed through the SEDAR website (www.sedar.com). The
forward-looking statements and information contained in this press
release are made as of the date hereof and Rock undertakes no
obligation to update publicly or revise any forward- looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
Rock Energy Inc.
Allen J. Bey
President and Chief Executive Officer
Rock Energy Inc.
Vice President, Finance and Chief Financial Officer
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