May 03, 2011
Doxa Energy Ltd Provides Operational Updates
VANCOUVER, BRITISH COLUMBIA - Doxa Energy Ltd. ("Doxa" or the "Company") is pleased to report that it has interest in five wells in production or in the process of being placed in production. The Company expects that all five wells should be producing and accruing cash flow by June 1st of this year. These wells include the Peeler Ranch No. 1-H, Epley No. 1-H, Sartain Assets Oil Unit No. 1-H, Koehn No. 1 and Martin-State Gas Unit No. 1. Furthermore, Doxa management reports that as a result of its success related to the projects encompassing these wells, it intends to significantly increase its cash flow in the second half of 2011 by capitalizing on numerous low risk, development wells offsetting those mentioned above. Doxa will participate in as many as eight new wells in the remainder of 2011.
Since its inception in mid-2010, Doxa has acquired the right to participate in drilling and seismic ventures covering 35,000 gross acres (primarily exploration) in South Texas representing 11,000 net acres to Doxa. This includes approximately 5,500 gross acres (1,000 net to Doxa) in the prolific Eagle Ford Shale, South Texas. Doxa has the potential to participate in up to 34 total wells in the Eagle Ford Shale alone, representing approximately 20% of the Company's current total US acreage. The Company has interest in over 50 future potential drilling locations with additions expected after the evaluation of 40 square miles of recently completed proprietary 3D seismic operations on its Sarco Creek Project. The Company is constantly pursuing new opportunities that could significantly increase its exploration and development footprint in the US, including the recently announced option to acquire a 20% interest under 18,000 acres in the emerging Mississippian Oil Play in northern Oklahoma (see Doxa news, April 28, 2011). The following updates outline more specifically what is transpiring on some of Doxa's current projects:
Peeler Ranch No. 1-H
As previously reported (see Doxa news, March 27, 2011), flow back operations were recently commenced on the Dewbre Operating - Peeler Ranch No. 1-H ("Peeler Ranch") after frac while plans for gas lift facilities are being finalized. In this regard, initial sales of oil and gas have commenced and the well achieved a high rate of over 300 BOPD and 150 MCFPD (325 BOEPD). Offset Operators have reported per well EUR (estimated ultimate recovery) in the range of 254-356 MBOE, which is in-line with Doxa's expectations for wells drilled on this project. The Company further anticipates that 10-14 wells could ultimately be drilled on the 2,005 acre Peeler Ranch lease, based on adjacent well spacing by EOG Resources Ltd. (NYSE) and others. The initial well is continuing to produce naturally pending installation of gas lift facilities, which is expected in the near term. As reported, the Peeler Ranch No. 1-H is the initial well on the Peeler Ranch Prospect, which was Doxa's Qualifying Transaction (see Doxa news, May 25, 2010). Doxa expects to commence the second well on this project within the next 90 days.
Sartain Assets Oil Unit No. 1-H
Doxa further disclosed that AWP Operating Company of San Antonio, Texas has initiated oil production and first sales from the Sartain Assets Oil Unit No. 1-H in Frio County, Texas. This initial well on the Sartain Assets Prospect is a re-entry of an existing well, which was horizontally drilled in excess of 4,200' within the Pearsall (Austin Chalk) formation at a true vertical depth of approximately 6,000'. The well is producing at a rate of over 200 BOPD on pump. Doxa owns a 12.5% working interest along with a 9.375% net revenue interest in this project. The company expects that 2-3 additional wells may ultimately be drilled on this project.
Sarco Creek 3D
The Company reports that all Sarco Creek 3D seismic operations have been completed and processing of the field data by Geotrace Technologies of Houston, Texas has commenced. Processing is expected to be completed in about 30 days after which, geophysical evaluation and prospect generation will commence. As previously reported, the data will initially be evaluated for oil and gas development opportunities in the Miocene and Frio formations above 5,000'.
Emshoff Unit No. 1ST
Furthermore, Doxa reports that the initial well on the Emshoff Prospect has been drilled to its total projected true vertical depth of the 16,400' and logged. Based on evaluation of the logs and other tests performed by Dynamic Production, Inc. as operator of the project, the well will be plugged and abandoned as a dry hole due to lack of development of the objective sands. The Company does not expect to participate in any additional wells on this project.
About Doxa Energy:
Doxa Energy Ltd. is an oil & gas production/development and exploration company concentrating on onshore only projects in the United States with a mix of unconventional (including the Eagle Ford Shale) and conventional projects. The Company is also reviewing additional US, onshore focused oil & gas opportunities. Doxa is committed to becoming a leading oil & gas company, achieving superior financial and operating results while simultaneously utilizing sound business, social, environmental and safety practices. Additional information on Doxa is available on the Company's website www.doxaenergy.com.
John D. Harvison
President, Chief Executive Officer
For further information contact:
Paul McKenzie or Scott Parsons, Directors at 604.662.3692 or visit www.doxaenergy.com
Neither TSX Venture Exchange nor its Regulation Services providers (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Statements in this press release other than purely historical information, including statements relating to the Company's future plans, objectives or expected results, constitute forward-looking statements. Forward-looking statements are based on numerous assumptions and are subject to the risks and uncertainties inherent in the Company's business, including risks inherent in oil and gas exploration and development, and uncertainties in connection with anticipated commodity prices for oil and natural gas, growth of worldwide market demand, exploration capital requirements, length of asset life and availability of qualified personnel, among others As a result, actual results may vary materially from those described in the forward-looking statements.
All references in this press release to BOE are based on a 6 Mcf to 1 Bbl conversion ratio. BOE's may be misleading particularly if used in isolation. A BOE conversion of 6 Mcf to 1 Bbl is based on the energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
BOPD refers to barrels of oil per day. MCFPD refers to thousand cubic feet of natural gas per day. BOEPD refers to barrels of oil equivalent per day based on a 6Mcf to 1 Bbl conversion ratio. One MBOE is defined as one thousand barrels of oil equivalent.
This new release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in the United States. The securities of Doxa have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws, and may not be offered or sold in the United States or to or for the account or benefit of a U.S. person unless so registered or pursuant to an available exemption from the registration requirements of such Act or laws.