VANCOUVER, BRITISH COLUMBIA
-- Doxa Energy Ltd. ("Doxa
" or the "Company
") is pleased to provide the following update regarding its continuing participation in the Mississippian Oil Play of northern Oklahoma. As previously reported, Doxa owns 20% interest in approximately 18,400 acres (3,600 net acres) situated primarily in Alfalfa, Grant, Garfield and Kay Counties, Oklahoma. This area is considered to be the core area of the quickly evolving Mississippian Oil Play. Although the current play is a little more than two years old, there are already over 600 horizontal wells drilled or drilling, and nearly 50 rigs running, according to recent public disclosures by the leading operators. Doxa expects to participate in 300--400 wells during the life of the play (assuming spacing of 3-4 wells per 640 acre drilling unit). Six wells incorporating portions of Doxa's acreage in Alfalfa and Grant Counties have already been drilled and are in varying stages of production and development as follows:
- Three wells have been completed and are currently producing. While 30 day sustained rates for all three wells are not available as of this date, initial flow back results indicate gross average peak rates per well of 223 barrels of oil (BOPD) and 1,008 MCF of natural gas per day (MCFGD), or 391 barrels of oil equivalent per day (BOEPD). These results compare favorably with the type well average of 275 BOEPD published by SandRidge Exploration and Production, LLC ("SandRidge"). The Company owns a four percent average working interest in each of these three wells. SandRidge is the designated operator of two of the producing wells, and Panther Energy Company, LLC operates one well.
- Three additional wells have been drilled and are in various stages of completion or pre-production, but are not on-line as of this date. Chesapeake Operating, Inc., Eagle Energy Production, LLC and Cisco Operating, LLC operate these ongoing projects, in which Doxa owns an average three percent working interest. The Company anticipates that all three of these wells will commence production within 2-4 weeks.
- Doxa is also participating for a five percent net working interest in one well currently being drilled by SandRidge in Grant County. Drilling operations should be completed within 2 weeks after which time completion operations will be undertaken.
- Finally, the Company is planning to participate in at least seven additional wells in the same area that have already been proposed to commence this summer by various operators, including one well offsetting the recently announced SandRidge-Puffinbarger No. 1-28H well in Alfalfa County, which tested 2,446 BOPD and 1,092 MCFD.
John D. Harvison, President and CEO of Doxa stated today that:
"I am very pleased that our early completion results indicate that Doxa's acreage is favorably positioned in the defined core area and that we are off on the right track to meet or exceed the targeted financial returns being realized by SandRidge and others in this play. The Mississippian Play has the potential to provide years of organic growth through the drill bit for Doxa and should provide very attractive financial returns for its shareholders."
Additional details related to the ongoing activity will be released in the near future once 30-day sustained rates from a number of these wells are available. Management believes that on average these wells will have an annual rate of return exceeding 90%, and expects to participate in 12-15 horizontal wells targeting the Mississippian Lime during 2012, with net working interest levels ranging from 1.67% to 5.0%. Estimated completed well costs are currently averaging US$3.6mil, but are expected to ultimately decrease to US$3.2mil per well as infrastructure is completed and efficiencies improve.
About Doxa Energy Ltd.
Doxa Energy Ltd. develops and maintains a portfolio of producing and developing conventional and unconventional assets, including the Eagle Ford Shale Oil Play in south Texas, and the recently announced acreage acquisition in the Mississippian Lime Play of northern Oklahoma.
John D. Harvison
President, Chief Executive Officer
For further information contact:
Paul McKenzie, Director at 604.662.3231 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.
This news 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.