CALGARY, ALBERTA -- (Marketwire) -- 02/25/13 -- Anderson Energy Ltd. ("Anderson" or the "Company") (TSX: AXL) provides the following update on its operations and key results of its year end reserves evaluation. The Company continues to focus on its Cardium light oil assets:
-- 75% of proved plus probable BOE reserves volumes are from the Cardium formation;-- 90% of proved plus probable pre-tax NPV 10% reserves value is from the Cardium formation;-- 55% of current BOE production is from Cardium properties;-- 148 additional net Cardium locations (97% Company operated) have been identified; and-- slickwater frac technology has significantly improved initial production rates for wells drilled in the Cardium formation.
WINTER DRILLING PROGRAM
Anderson has completed its winter drilling program with 6 gross (4.3 net revenue) Cardium oil wells drilled, completed and on production. The Company has completed all of its drilling commitments on third party lands. Wells were drilled in the Ferrier, Willesden Green, Garrington and Buck Lake project areas. Drilling and completion costs were approximately $2.3 million per well in this program.
SLICKWATER FRAC TECHNOLOGY
In February 2012, Anderson initiated its first slick water frac completion in the Cardium formation. The Company had previously employed gelled water and gelled hydrocarbon frac techniques in this formation. Encouraged by the success of its first slick water frac completion and recent industry activity in slick water frac technology, the Company used slick water fracs on its six well Cardium horizontal winter drilling program this winter. Production information from the seven wells confirms that initial production is significantly higher when slick water frac technology is used in the Cardium formation compared to previously used gelled water and gelled hydrocarbon frac techniques. This conclusion is supported by industry activity offsetting Company interest lands. For the wells drilled by the Company that were completed using slick water frac technology, the average initial production ("IP") performance for various calendar day averages is shown below:
Average Gross Initial Production for first X days (IP X) IP 30 IP 60 IP 90 IP 180Number of wells in average 6 3 1 1Barrels of oil per day (BOPD) 260 201 247 155Barrels of oil and NGL per day (BPD) 289 223 296 193Barrels of oil equivalent per day (BOED)(i) 417 342 582 415----------------------------------------------------------------------------
(i) Barrels of oil equivalent ("BOE") maybe misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The last well drilled in the winter program is not included in the above table as it only recently came on-stream. This well has produced at an average rate of 734 BOPD (860 BOED) over 18 days without artificial lift.