Nextraction Increases Position in Provost Viking Play

- Nextraction Increases Position in Provost Viking Play

Thursday, July 14, 2011
Nextraction Energy Corp.

Nextraction has substantially increased its leasehold position in the Provost Viking A oil pool by 92%, increasing its net acreage position from 1.625 to 3.125 sections (1040 acres to 2000 acres). Nextraction acquired one section at a 100% working interest (640 acres net to Nextraction) at a cost of $701,584, and one section at a 50% working interest (320 acres net to Nextraction) at a cost of $401,088. The two newly acquired sections are contiguous to each other and are one mile from the Company's existing 50/50 joint venture acreage, allowing for the potential to use existing infrastructure. The acquisition essentially doubles the Company's drilling inventory of horizontal locations up to 36 wells. Nextraction has identified 21 locations on 400 meter spacing whereby the Company could drill at least 4 wells owning 100% interest, and own a 50% interest in 17 locations (resulting in a further 8.5 net wells). In addition, another 15 locations may be drilled at a 50% interest (7.5 net wells), should down spacing be warranted.

The acreage is also prospective for light oil production from the Dina formation that is approximately 150 meters below the Viking formation. A historical well on the acreage produced 18 Mbbls of oil from the Dina formation.

The Company is also pleased to announce that it participated in the successful re-completion of a well on its existing acreage. The well had not been previously fracture stimulated, so the well was fractured using the same technique the Company plans to use on its first horizontal well. Prior to re-completion of the well in mid-June, it produced three barrels of oil per day and is now currently producing 29 barrels of light oil per day, a ten-fold increase. Payout is projected at three months.

The Company is encouraged by the results of the frac as it confirms the high productivity potential of the Company's acreage. The well has been producing for two years and is located directly between two wells that have cumulatively produced 520 Mbbls to date and continue to produce 20 bbls per day of oil. Reservoir pressure measured after completion was near original pressure, suggesting little depletion. The high production rates from the well are consistent with the high pressure and indicate good quality reservoir, as expected. The Company is currently drilling its first horizontal well in the pool offsetting these wells and plans to multi-stage fracture this first horizontal well in the Viking zone in the coming days. The Company also plans to drill a second horizontal well on this joint venture acreage in the third quarter of 2011.

Mark S. Dolar, President & CEO of Nextraction, commented, "We value the Crown leases acquired yesterday as a strategic asset to our Company's growth. We believe the acreage to be very prospective for a multi-well development program and will expand our ability to focus on developing the Viking formation for value added reserves. With our experience and expertise in developing the Viking sand by horizontal drilling and multi-stage fracturing, we see this project as an excellent way to add significant oil reserves as we move towards our goal of being 80% light oil weighted by the end of this year."

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Nextraction to Develop Viking, Bakken Oil Properties

Nextraction to Develop Viking, Bakken Oil Properties

Tuesday, April 19, 2011
Nextraction Energy Corp.

Nextraction announced its 2011 plans to develop its light oil projects in Alberta and Montana. The development will include drilling two horizontal wells, the re-completions of existing wells in the Provost Field in Alberta, Canada, acquiring 22 miles of three dimensional (3-D) seismic data and the drilling of the initial well on the Saturn acreage located in the Williston Basin of eastern Montana, USA.

In addition, the Company reported completion of its initial well on the Pinedale Anticline produced at an average rate of 104 barrels of oil equivalent (BOE) while continuing to flow back frac fluids at year-end 2010.

Nextraction's President, Mark S. Dolar stated, "This is a very exciting time for Nextraction. We achieved our goal of establishing production and proving reserves at our Pinedale property and look to build on that base as we plan to increase daily production rates at Provost by drilling new horizontal wells and re-completing existing wells. We will follow the Provost drilling with development on the Saturn acreage. The Provost Field is known for short term payouts and impressive internal rates of return while Saturn contains potential for large scale, long life development." Mr. Dolar continued, "We remain debt free and we have the opportunity to generate significant cash flow and increase our net reserves while maintaining our current share structure."

Plans for development are as follows:

Provost Pool - Alberta, Canada

The Company plans to drill two, 810 meter Viking formation wells, off-setting existing wells with cumulative production of 665,000 barrels of oil. The wells are being licensed to drill horizontal legs of at least 900 meters in length each. The Company also plans to re-complete existing wells on the property to test a zone in the Viking formation that has yet to be tested by implementing new fracing technologies to the zone. Estimated cost for the project is $3 million (net to the Company).

The Company is a 50% interest owner in the project, but receives 100% of the revenue until it receives $1.4 million in production revenue or re-payment (as a loan to its joint venture partner). The Company will fund and operate the drilling of the first two development wells on the property and will receive 50% of the revenue from production. For all subsequent operations, the Company participates as a 50% interest owner.

Saturn Project - Montana, USA

The Company has completed permitting a 22 square mile area for three dimensional (3-D) seismic work and plans to acquire the data in the second quarter. A well is planned to be drilled based on interpretation of the seismic testing on the 35 section property. The Company's expected expenditures for the Saturn seismic program is $900,000 for the 22 square mile acquisition (a 15 square mile program was previously estimated to cost $500,000-$650,000) and estimated cost to drill, core and complete the 2,350 meter test well is $1.2 million.

The Company will look to develop the project as a multi-well program based on appropriate test well data. The properties are being developed under terms of a Seismic Option and Farm-out Agreement. Under the terms of the agreement, the Company will operate the project and fund 75% of the data collection costs for the seismic program. Prior to commencing the first core test well, its partner will have the option to participate as a 25% interest owner. Should the partner participate in the drilling of the well, the before payout interest will be shared 75% by Nextraction and 25% by the partner, after payout interests will be shared 52.5% by Nextraction and 47.5% by the partner. If the partner does not participate in the well, Nextraction will own 100% before payout and 70% after payout.

Pinedale - Wyoming, USA

After an initial 24 hour flow rate of 3 million cubic feet of gas per day from the upper 400 feet of net sand in the Lance and Tertiary formations from the Company's 100% owned Noble 6-24 well, the well produced and flared 8,074 MCFG, 28 Barrels of Condensate and 166 barrels of water/frac fluids from 11 days of production in December, 2010.

The Company became the operator of the project on February 1, 2011. In assuming operations, the Company will have the ability to develop the properties in a more efficient and cost effective manner and assist in lifting fluids from the well. The Company placed an electric compressor on location in mid-March to assist in lifting fluids that are known to produce with the natural gas and condensate on the Anticline. Nextraction predicts that with this compressor, daily production should average in the range of 800-1,000 mcfgpd and 20 barrels of condensate from the unconventional tight sands. Without compressor assistance, the well averages 400 mcfgpd and 8 barrels of condensate. The producing intervals in the well remain over-pressured, which indicates that the well should perform at the anticipated rates once completion fluids are drawn from the well.

To further enhance future drilling locations, the Company has also acquired 3-D seismic and plans to obtain 2-D seismic on the property in this year.

Mr. Dolar commented, "By completing the first well in Pinedale, we have taken great steps toward development of this project. As our knowledge of Pinedale increased, we realized that the use of artificial lift is essential for removing associated water production that flows with the gas and condensate. The decision to place an electric compressor on site to assist in drawing down the water levels and increase gas production from the well also lessens our carbon footprint and assists in our compliance with clean air requirements. As seismic is completed on Pinedale, we will determine the next strategy for development to enhance value to the Company."

Nextraction to Develop Viking, Bakken Oil Properties

Nextraction to Develop Viking, Bakken Oil Properties

Tuesday, April 19, 2011
Nextraction Energy Corp.

Nextraction announced its 2011 plans to develop its light oil projects in Alberta and Montana. The development will include drilling two horizontal wells, the re-completions of existing wells in the Provost Field in Alberta, Canada, acquiring 22 miles of three dimensional (3-D) seismic data and the drilling of the initial well on the Saturn acreage located in the Williston Basin of eastern Montana, USA.

In addition, the Company reported completion of its initial well on the Pinedale Anticline produced at an average rate of 104 barrels of oil equivalent (BOE) while continuing to flow back frac fluids at year-end 2010.

Nextraction's President, Mark S. Dolar stated, "This is a very exciting time for Nextraction. We achieved our goal of establishing production and proving reserves at our Pinedale property and look to build on that base as we plan to increase daily production rates at Provost by drilling new horizontal wells and re-completing existing wells. We will follow the Provost drilling with development on the Saturn acreage. The Provost Field is known for short term payouts and impressive internal rates of return while Saturn contains potential for large scale, long life development." Mr. Dolar continued, "We remain debt free and we have the opportunity to generate significant cash flow and increase our net reserves while maintaining our current share structure."

Plans for development are as follows:

Provost Pool - Alberta, Canada

The Company plans to drill two, 810 meter Viking formation wells, off-setting existing wells with cumulative production of 665,000 barrels of oil. The wells are being licensed to drill horizontal legs of at least 900 meters in length each. The Company also plans to re-complete existing wells on the property to test a zone in the Viking formation that has yet to be tested by implementing new fracing technologies to the zone. Estimated cost for the project is $3 million (net to the Company).

The Company is a 50% interest owner in the project, but receives 100% of the revenue until it receives $1.4 million in production revenue or re-payment (as a loan to its joint venture partner). The Company will fund and operate the drilling of the first two development wells on the property and will receive 50% of the revenue from production. For all subsequent operations, the Company participates as a 50% interest owner.

Saturn Project - Montana, USA

The Company has completed permitting a 22 square mile area for three dimensional (3-D) seismic work and plans to acquire the data in the second quarter. A well is planned to be drilled based on interpretation of the seismic testing on the 35 section property. The Company's expected expenditures for the Saturn seismic program is $900,000 for the 22 square mile acquisition (a 15 square mile program was previously estimated to cost $500,000-$650,000) and estimated cost to drill, core and complete the 2,350 meter test well is $1.2 million.

The Company will look to develop the project as a multi-well program based on appropriate test well data. The properties are being developed under terms of a Seismic Option and Farm-out Agreement. Under the terms of the agreement, the Company will operate the project and fund 75% of the data collection costs for the seismic program. Prior to commencing the first core test well, its partner will have the option to participate as a 25% interest owner. Should the partner participate in the drilling of the well, the before payout interest will be shared 75% by Nextraction and 25% by the partner, after payout interests will be shared 52.5% by Nextraction and 47.5% by the partner. If the partner does not participate in the well, Nextraction will own 100% before payout and 70% after payout.

Pinedale - Wyoming, USA

After an initial 24 hour flow rate of 3 million cubic feet of gas per day from the upper 400 feet of net sand in the Lance and Tertiary formations from the Company's 100% owned Noble 6-24 well, the well produced and flared 8,074 MCFG, 28 Barrels of Condensate and 166 barrels of water/frac fluids from 11 days of production in December, 2010.

The Company became the operator of the project on February 1, 2011. In assuming operations, the Company will have the ability to develop the properties in a more efficient and cost effective manner and assist in lifting fluids from the well. The Company placed an electric compressor on location in mid-March to assist in lifting fluids that are known to produce with the natural gas and condensate on the Anticline. Nextraction predicts that with this compressor, daily production should average in the range of 800-1,000 mcfgpd and 20 barrels of condensate from the unconventional tight sands. Without compressor assistance, the well averages 400 mcfgpd and 8 barrels of condensate. The producing intervals in the well remain over-pressured, which indicates that the well should perform at the anticipated rates once completion fluids are drawn from the well.

To further enhance future drilling locations, the Company has also acquired 3-D seismic and plans to obtain 2-D seismic on the property in this year.

Mr. Dolar commented, "By completing the first well in Pinedale, we have taken great steps toward development of this project. As our knowledge of Pinedale increased, we realized that the use of artificial lift is essential for removing associated water production that flows with the gas and condensate. The decision to place an electric compressor on site to assist in drawing down the water levels and increase gas production from the well also lessens our carbon footprint and assists in our compliance with clean air requirements. As seismic is completed on Pinedale, we will determine the next strategy for development to enhance value to the Company."