Chesapeake's Buffalo Creek Well Hits Production Milestone

- Chesapeake's Buffalo Creek Well Hits Production Milestone

Monday, July 18, 2011
Chesapeake Energy

Chesapeake Energy Corporation today announced its Buffalo Creek 1-17 well located in Beckham County, Oklahoma, recently surpassed cumulative gross production of more than 60 billion cubic feet of natural gas (bcf). Chesapeake operates the well with an 82.6% working interest and a 65.8% net revenue interest.

Chesapeake originally spud the well in May 2002 and reached a total depth of approximately 21,000 feet in the Cunningham Sand of the Deep Springer formation with first sales commencing in December 2002. The well averaged approximately 41 million cubic feet of natural gas (mmcf) per day for the first two years of production and is still producing approximately 8 mmcf per day.

Total gross capital expenditures to drill and complete the well were $8.5 million and subsequent operating expenses have been $1.4 million, or $0.024 per thousand cubic feet of natural gas equivalent (mcfe). Total gross revenue has been approximately $320 million, which includes approximately $65 million paid to royalty owners and approximately $15 million paid in severance tax to the state of Oklahoma. Total net cash flow from the well to the working interest owners has been approximately $230 million, or a multiple of 27 times the original cost of drilling and completing the well, and the realized price per mcfe has averaged $5.35.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “The Buffalo Creek 1-17 has certainly been a special well in the history of Chesapeake. As early pioneers drilling deep conventional wells using 3-D seismic in the Anadarko Basin, the success of the Buffalo Creek 1-17 well initiated a process almost 10 years ago that has now led to Chesapeake owning the largest leasehold position in the Anadarko Basin. This industry-leading leasehold position has proved to be exceedingly valuable as unconventional plays such as the Granite Wash, Cleveland and Tonkawa plays have emerged in areas in and around our traditional strongholds of conventional Anadarko Basin production. We believe that this is only the sixth well in Oklahoma history to reach this remarkable milestone of 60 bcf of cumulative production and Chesapeake now operates four of the six most prolific natural gas wells ever drilled in Oklahoma. I offer my congratulations to the entire Chesapeake Anadarko Basin team for being part of this historic well.”

McClendon added, “As a result of this well’s success and the many other successful Deep Springer wells we have drilled in the Anadarko Basin over the years that followed the drilling of the Buffalo Creek 1-17, we continue to pursue ultra-deep 3-D based Deep Springer drilling in the Anadarko Basin and we are currently operating three rigs in the play, where we believe at least another 185 wells can be drilled in the years ahead on our approximate 75,000 net acres of Deep Springer leasehold.”

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Drilling Completed at Tunis Creek Prospect

- Drilling Completed at Tunis Creek Prospect

Wednesday, June 29, 2011
Victory Energy Corp.

Victory Energy, through its partnership with Aurora Energy Partners, announced the successful completion of its Tunis Creek Oil and Gas Prospect in Pecos County, Texas. The University "6" #1 Tunis Creek well was spud on April 22, 2011 and was completed in the Ellenburger formation on Friday, June 24, 2011.

Very preliminary testing of the Ellenburger formation indicates that oil reserves could exceed earlier estimates. Pre-drilling internal total prospect reserve estimates exceeded 500,000 barrels. These preliminary flow tests on the University "6" #1 Tunis Creek well were performed using its natural bottom-hole pressure and was limited to the lower 20 percent of the Ellenburger formation in the wellbore. Sustained flow tests to evaluate bottom-hole pressure and to develop optimal flow rates for this well should occur over the next thirty days. Storage tanks are scheduled to be installed this week with oil sales to market occurring shortly thereafter. Associated natural gas testing has not yet occurred. A natural gas delivery pipeline is nearby.

Based on the positive results of this first well and the previously identified multiple oil and gas pay zones above this producing formation, the company will immediately begin evaluating locations for a second well on the acreage. Several additional development wells may be drilled if production warrants. Field rules established by the State of Texas will determine the exact number of wells.

Robert Miranda, Victory Energy's chairman and CEO, stated, "These preliminary completion results are outstanding and offer the first sizable validation of our ability to use our extensive network of oil and gas contacts to deliver immediate value to our shareholders. Wells of this quality and with reserves of this size are not typically available to micro-cap companies like Victory Energy. The additional development drilling opportunities available on the Tunis acreage could afford us at least two additional years of drilling at this location."

Victory Energy, through its partnership with Aurora Energy Partners, holds a 5 percent working interest and a 3.75 percent net revenue interest in this oil focused prospect.

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Connacher O&G to Sell Halfway Creek Leases

- Connacher O&G to Sell Halfway Creek Leases

Wednesday, June 22, 2011
Connacher O&G Ltd.

Connacher O&G announced that in conjunction with Alberta Oil Sands ("AOS"), has engaged RBC Rundle to assist in the sale of a 100 percent working interest (held 50 percent by Connacher and 50 percent by AOS) in 38.5 contiguous sections (24,640 acres) of oil sands leases located at Halfway Creek, in the heart of the Athabasca oil sands region in northeast Alberta.

As at December 31, 2010, in aggregate, the Halfway Creek leases have been assigned 154.5 million barrels of best estimate contingent resources and 47.7 million barrels of best estimate prospective resources based on an independent reserve and resource report prepared by GLJ Petroleum Consultants Ltd. ("GLJ"). To date, a total of 32 core holes have been drilled on the Halfway Creek lands and the lease block has been covered by 2-D seismic. Connacher is disposing of its interest in the Halfway Creek leases to allow the company to continue to focus on its Great Divide assets as its core oil sands region. As evaluated by GLJ in a report as at December 31, 2010, Great Divide has the potential for greater than 55,000 bbl/d of bitumen production, based on estimates of proved plus probable plus possible reserves.

Assuming successful completion of the disposition process, the transaction would further fortify Connacher's liquidity position. The disposition is consistent with the company's previously announced five-point strategy for 2011, which includes asset rationalization, production optimization, streamlining its balance sheet, accelerating its evaluation of its conventional resource plays and accelerating the development of its Great Divide oil sands assets through a process to conclude a joint venture.

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Bonanza Creek Welcomes New Board Members

Bonanza Creek Welcomes New Board Members

Monday, April 25, 2011
Bonanza Creek Energy Inc.

Bonanza Creek announced the appointment of Jim Casperson, Marvin Chronister, and Kevin Neveu to the Company's Board of Directors. Messrs. Casperson, Chronister, and Neveu are Bonanza Creek's first independent directors. In addition to the three new independent directors, Bonanza Creek's seven person board also includes Chairman of the Board Richard Carty of West Face Capital, Inc., Todd Overbergen of D.E. Shaw & Co., Michael R. Starzer, President and Chief Executive Officer, and Gary A. Grove, Executive Vice President – Engineering and Planning.

Mr. Casperson has over 30 years of experience in the oil and gas industry and finance and accounting in the public and private sectors. Mr. Casperson is currently a private consultant to the energy industry. Mr. Casperson holds a BBA in accounting from Texas Tech University. Mr. Casperson has been appointed as Chairman of both the Audit Committee and the Reserve Committee.

Mr. Chronister has over 30 years experience in the oil and gas industry. Mr. Chronister is currently an independent investor, energy finance and operations consultant for Enfield Companies and on the Board of Sonde Resources Corp. Mr. Chronister holds a Bachelor of Business Administration degree from Stephen F. Austin State University. Mr. Chronister has been appointed as Chairman of the Environmental Safety & Regulatory Compliance Committee and will serve on the Audit Committee.

Mr. Neveu has over 25 years of experience in the oil and gas industry. Currently, Mr. Neveu serves as a director, President and Chief Executive Officer of Precision Drilling Corporation. Mr. Neveu holds a Bachelor of Science degree and is a graduate of the Faculty of Engineering at the University of Alberta. Mr. Neveu is a Professional Engineer, as designated by the Association of Professional Engineers, Geologists and Geophysicists of Alberta and has attended the Advanced Management Program at the Harvard Business School. Mr. Neveu serves on the boards of RigNet Inc., the Heart and Stroke Foundation of Alberta, and the International Association of Drilling Contractors. Mr. Neveu has been appointed to serve on the Compensation Committee and the Environmental Safety and Regulatory Compliance Committee.

"The addition of these three independent directors is an important step in developing our board," said Bonanza Creek's President and Chief Executive Officer, Mike Starzer. "Jim's and Marvin's breadth and depth of knowledge and experience in accounting and finance will be a great asset to Bonanza Creek. Kevin's wide range of experience in the energy sector in management and operations will be leveraged strategically and operationally. I welcome them all to our team." Richard Carty, Chairman of the Company's board said "Bonanza Creek's new directors will be able to work with the Company's executive team and other directors to manage the Company's continued growth and drilling programs. We are very excited to utilize the resources they bring to the board and look forward to their impact on Bonanza Creek's continued growth."