The Company will file its Annual Information Form, which will include Hyperion's reserves data and other oil and gas information for the year ended December 31, 2012 as mandated by NI 51-101, on or before April 22, 2013.
In 2012 Hyperion announced a new undeveloped land acquisition and farm-in in the Niton/McLeod area of west central Alberta for the development of a new, internally sourced, Cardium light oil development. Hyperion has access to 34,000 net acres of undeveloped land on this trend with up to 156 net un-booked horizontal drilling locations identified.
Hyperion has significantly de-risked the Niton/McLeod development with 5 gross (4.89 net) Cardium light oil wells drilled and now on production. Based on modelling nearby vertical Cardium production, Hyperion developed a horizontal Cardium oil well production performance type curve that exhibits an IP30 rate of 160 boe/day (92% light oil) and reserves of 145 mboe (83% light oil).
Hyperion is very encouraged by its Cardium horizontal well performance to date and the Company continues to improve on capital efficiency. The first Cardium horizontal oil well drilled by Hyperion in the Niton/McLeod area, utilized intermediate casing, which is considered the lowest risk drilling procedure for evaluating a new area. Hyperion was satisfied through the drilling of the first well that the Cardium formation drills in the area as expected. This gave confidence in switching to a mono bore drilling procedure which has significantly reduced drilling times and associated well costs. Hyperion's capital cost for its first horizontal Cardium well in the area was $3.85 million compared to one of the last wells drilled, at $3.25 million. The mono bore drilling procedure, increased use of pad drilling and other efficiencies realized on completion/tie ins are expected to save up to $750 thousand of capital per well, reducing capital costs to $3.10 million per well. In addition, the Company expects additional costs savings to be realized under a continuous drilling operation through minimized mobilization costs.
Hyperion has also become more capital efficient with completion techniques and will make further refinements on future wells. The Company has learned that equipping wells with artificial lift as quickly as possible after a brief flow back period can save significantly on testing and evaluation costs. Reduced flow back and testing means Hyperion must rely on the bottom hole pump to unload completion fluid. Despite extended clean up times and the potential for reduced IP30 rates as a result of this technique, the Company has demonstrated a shallower production decline over the first 60 days, allowing the well to achieve the same cumulative oil production as the type curve for this period.
The performance of Hyperion's drilling program in the Niton/McLeod area to date is as follows:
Hyperion's first Cardium horizontal light oil well drilled at Niton/McLeod was spud on September 9, 2012 and placed on production October 24, 2012. The horizontal well was completed with a 20 stage slick water based fracture completion. The well was flow tested for an extended five day period for clean-up of frac water and to initiate oil production. This well achieved an IP30 (average production during the first 30 days of production) of 190 boe/day (86% oil). During the fifth month of production, the well continues to meet type curve production performance with a production rate of 64 boe/day(80% oil).
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