Bronco Energy Ltd. announces that it has completed the drilling, completion and equipping of six horizontal wells in the Wabiskaw formation on Indian Oil and Gas Canada (“IOGC”) Mineral Lease OL 6117, located at Wabasca, Alberta in the heart of the Athabasca Oil Sands Deposits, and has placed the wells on production to temporary facilities.
The drilling program was executed on time and under budget with a 100% success rate. The average horizontal well length drilled was 1603 metres per well. The six wells encountered an average oil saturated pay exposure of 94%. Management of Bronco believes this to be an excellent result and has high expectations for all six wells.
The two highest risk wells located at 5-36-79-23W4 and 2-19-79-22W4 were placed on production during the last week of 2006. They are each currently producing at approximately 100 barrels of oil per day. Due to higher than expected inflow capability, the wells are limited by facilities and require more production tankage. The pumping fluid level has only been drawn down from surface to 200 metres. Bronco plans on installing additional production tanks in the coming weeks and, once completed, a further fluid draw down to 450 metres is expected to yield much higher production rates. The four remaining lower risk wells were drilled from a single pad located at 11-06-80-22W4 and were placed on production last week. These four wells are presently recovering completion fluids and new oil production is expected in the near future. Fluid levels on these four new wells started at surface and the production profiles are behaving similarly to the aforementioned 5-36 and 2-19 wells.
Due to these encouraging results, the company anticipates proceeding with its plans for an approximate 44 horizontal well infill drilling program on IOGC Mineral Lease OL 6117 in the Wabiskaw formation. This infill drilling program is expected to commence in the first quarter of 2007. The new 5-36 and 2-19 oil wells are located at the south end and in the middle of Bigstone Reserve 166, respectively. The two wells were the highest risk due to their locations and now have confirmed the extension of the main Pelican Lake field, situated to the north of Bigstone Reserve 166. Additionally, the design and construction of central oil processing facilities and gathering pipelines is expected to proceed in conjunction with the drilling program.
Mr. Brian Alford, President and CEO, stated, “Bronco’s horizontal well drilling and production program have exceeded its expectations and the company looks forward to delivering similar results in the future. Bronco is well positioned for long term sustained production and reserves growth. It is also especially rewarding to have our joint venture partners, the Bigstone Cree Nation, prosper in unity with Bronco and its investors.”
On another matter, Bronco has been made aware of a letter and statements issued by IOGC that express concern about the content of some of the company’s press releases relating to certain terms of its joint venture with the Bigstone Cree Nation (“BCN”). Bronco’s advisors and the Chief and Council of the BCN have reviewed IOGC’s letter and the press releases in question and they have determined that the company’s press releases are accurate, representative and factual. Bronco and the BCN will attempt to address IOGC’s concerns and will continue with the exploration, development and production of oil sands resources for the benefit of the BCN people and Bronco’s investors.
Bronco Energy Ltd. trades on the TSX Venture Exchange under the symbol “BCF”.
This news release contains forward-looking statements which involve known and unknown risks, delays and uncertainties not under Bronco’s control which may cause actual results, performance or achievements of Bronco to be materially different from the results, performance or expectations implied by these forward-looking statements.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities offered have not and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Bronco Energy Ltd.
President and Chief Executive Officer
(403) 693-0038 (FAX)
Bronco Energy Ltd.
Chief Financial Officer
(403) 693-0038 (FAX)
Source: Bronco Energy Ltd.