VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/17/13 -- Doxa Energy Ltd. ("Doxa" or the "Company") (TSX VENTURE: DXA) (OTCBB: DXAEF) (FRANKFURT: 5D0) today provided an update of its 2013 drilling program in the Mississippian Lime Play and other areas.
Doxa reports that during the first five months of 2013, nine (9) new horizontal wells were completed and put on-line in the Mississippian Lime Play. The new wells increase its total interests in the play to 26 gross wells (.83 net). In addition, the Company plans to participate in at least fifteen (15) additional wells during the remainder of 2013, with working interests ranging from 1.67% to 5% net. The majority of the wells are being operated by SandRidge Exploration and Production, LLC of Oklahoma City.
Average peak production rates for the twenty-three (23) wells that have been producing for at least 30 days total 240 barrels of oil equivalent (BOE) per day, 138 barrels of oil (BOPD) and 607 thousand cubic feet of natural gas (MCFD). The most recent completed horizontal well, situated in central Alfalfa County, Oklahoma, was put on-line within the last week at a peak 24 hour rate in excess of 650 BOEPD, comprised of 380 BOPD and 1,700 MCFD. In addition, estimates for completed well costs have declined from an average of $3.7mil for the 16 gross wells Doxa participated in 2012, to just over US$3.4 for the 9 wells completed in 2013. Well costs are expected to continue to decline and eventually average US$3.1 - $3.2mil per well, as infrastructure is completed and efficiencies improve.
As previously reported, Doxa owns an undivided 20% participating interest in 17,347 gross leasehold acres, being 3,469 net acres owned by the Company. To date, the Company has invested approximately US$3.0 mil in drilling and completing the 26 producing wells, which are currently generating approximately US$80,000 in aggregate net revenue per month after deduction of royalty and taxes. With regard to the 26 wells Doxa has participated in so far, 52% of the total BOE production is comprised of oil and 48% natural gas.
Doxa's current monthly revenue attributable to all wells it has participated in is approximately US$225,000 per month. Lease operating expenses on average account for approximately 16% of the revenue stream. Estimated drilling and completion cost, net to Doxa's interest, averages US$117,000 per well.
In addition to the foregoing update on its Mississippian operations, Doxa reported recent results at its Sarco Creek project in Goliad County, Texas. A third conventional shallow well drilled on the project to a depth of 5,525 feet subsurface failed to encounter commercial quantities of oil or gas and was deemed a dry hole. Management has decided to suspend additional drilling on this project pending re-evaluation of the geological/geophysical data relied on in selecting prospect locations. Doxa's estimated share of drilling cost for the well is US$120,000 for its 30% interest.
John D. Harvison, President and CEO of Doxa commented that: "The results of our initial exploration program at Sarco Creek were disappointing and clearly illustrate the nature and risk associated with oil and gas exploration business as a whole." He added "We are confident that our focus on the Mississippian Lime Play of Oklahoma will provide our shareholders with attractive financial returns in the coming years and allow us to expand into other regions and new plays."
About Doxa Energy Ltd.
Doxa Energy Ltd. develops and maintains a portfolio of producing and developing conventional and unconventional assets, including the Mississippian Lime Play in northern Oklahoma, the Frio, Wilcox and Eagle Ford Shale trends in South Texas.
John D. Harvison, President, Chief Executive Officer
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.
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.
Doxa Energy Ltd.
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