DENVER, March 12, 2014 /PRNewswire/ -- Double
Eagle Petroleum Co. (NASDAQ: DBLE) provided today an operations
update on its development activities in the Spyglass Hill and Mesa
Units, and exploration updates on certain undeveloped
acreage.
Drilling Operations
Atlantic Rim
Drilling activities in 2013 in the
Atlantic Rim occurred in the Spyglass Hill Unit, where the Company
participated in 27 wells in the Doty Mountain participating area
("PA") with production from these wells commencing in 2014. Based
on the Company's experience in the area, wells in the Spyglass Hill
Unit of the Atlantic Rim typically take one to three years to reach
full production due to existing less efficient water handling
infrastructure. The Company's average working interest share of
costs in these new wells was approximately 11.7%, with an as
adjusted estimated net revenue interest of approximately 19.7% in
the PA (and the production and reserves associated with these
wells).
The operator in the Spyglass Hill Unit, Warren Resources, Inc.
(NASDAQ: WRES), announced its plans to drill 48 wells within the
unit in 2014 to satisfy drilling requirements through 2015. While
the Company is awaiting specific well locations, it expects several
of the wells to be in the Sun Dog PA. The Company plans to
participate in these wells, to the extent that the wells are
drilled on its leases. Based on drilling activities thus far in the
Spyglass Hill Unit, the Company estimates working interest costs
for any wells drilled on its acreage to range between 10-12% with
an as adjusted estimated net revenue interest ranging between
14-16%. Working interest costs and net revenue interests will be
determined by the location of the well within the Spyglass Hill
Unit and will be determinable once the Company is provided specific
well locations by the operator. The operator has also announced its
plans to drill six injection wells to provide for more efficient
dewatering of current and future wells in order to accelerate
production growth.
The operator performed an in depth analysis of well logs and
historical production of the Spyglass Hill Unit indicating:
- 175 drilling locations,
- 400 possible additional locations, and
- 60 possible recompletion opportunities for drilled wells that
had not been fracture stimulated and are presently shut in.
Pinedale Anticline
The Company participated in 11
wells in the Mesa "B" PA on the Pinedale Anticline in 2013 and one
well thus far in 2014. Future drilling activity will move to the
Mesa "A" PA, where the Company has a 0.3% overriding royalty
interest, and thereafter to the Mesa "C" PA, which is anticipated
to occur beginning in 2016. Double Eagle has an approximate 9%
average reversionary carried interest in the Mesa "C" PA.
Accordingly, while the Company will participate in all new wells in
the Mesa "A" and "C" PAs, no additional capital from the Company
will be required.
Exploration Projects
There has been recent exploration activity in the vicinity of
three of the Company's key undeveloped acreage holdings.
Washakie Basin
The
drilling of three Niobrara wells
is planned in the Washakie Basin,
south of Double Eagle's existing Niobrara well. Under a farmout agreement with
Entek Energy Limited, GRMR Oil and Gas, LLC, an affiliate of
privately held East Resources, Inc., is shooting seismic with plans
to drill three horizontal wells which would be the first such
wells targeting the Niobrara
formation in Carbon County,
Wyoming. The Company owns over 40,000 net acres in the
Washakie Basin. Additionally,
Southwestern Energy Company recently acquired over 300,000 net
acres in northwest Colorado (south
of Entek's acreage), so drilling in the play may well
accelerate.
Hanna Basin
Drilling
by a third party operator is expected later this year in the
Hanna Basin of Carbon
County. Seismic has been shot and drilling is expected to
target the Niobrara formation, as
well as more conventional zones. Double Eagle
holds 12,300 net (22,800 gross) acres in the Hanna Basin and will be monitoring drilling
results as they are announced by the operator.
Huntington Valley
Noble Energy, Inc. (NYSE: NBL) has
leased over 300,000 net acres in northeast Nevada, including acreage in Elko County, where Double Eagle holds
approximately 6,100 net (22,500 gross) acres with overriding
royalties that vary from 2% to 5%. The Company
received notification of Noble's intent to form two Federal
exploratory units, one of which would include several of Double
Eagle's leases. Noble has obtained 3-D seismic over most of the
proposed unit area and is evaluating potential drilling
sites. Subject to approval of the proposed unit by the Bureau
of Land Management, a portion of the acreage in which Double Eagle
owns an interest would be included for participation in the
unit.
About Double Eagle
Double Eagle Petroleum Co., which is headquartered in
Denver, Colorado, explores,
develops, and sells natural gas and crude oil, primarily in the
Rocky Mountain region. The Company currently has development
activities and opportunities in its Atlantic Rim coalbed methane
project and on the Pinedale Anticline in Wyoming. Also,
exploration potential exists in both its Niobrara acreage in Wyoming and Nebraska, which totals over 70,000 net acres,
and in its acreage in Elko County,
Nevada.
This release may contain forward-looking statements regarding
Double Eagle Petroleum Co.'s future and expected performance based
on assumptions that the Company believes are reasonable. No
assurances can be given that these statements will prove to be
accurate. A number of risks and uncertainties could cause
actual results to differ materially from these statements,
including, without limitation, decreases in prices for natural gas
and crude oil, unexpected decreases in gas and oil production, the
timeliness, costs and results of development and exploration
activities, unanticipated delays and costs resulting from
regulatory compliance, and other risk factors described from time
to time in the Company's Forms 10-K and 10-Q and other reports
filed with the Securities and Exchange Commission. Double
Eagle undertakes no obligation to publicly update these
forward-looking statements, whether as a result of new information,
future events or otherwise.
Company Contact:
John Campbell, IR
(303) 794-8445
www.dble.com
SOURCE Double Eagle Petroleum Co.