Successful Drilling Continues on All of
the Company's Oil-Focused Drilling Projects
Mississippian Limestone Horizontal Play
Moving Into Western Kansas
Credo Petroleum Corporation (Nasdaq:CRED), an oil and gas
exploration and production company with significant assets in the
North Dakota Bakken and Three Forks, Kansas, Nebraska, the Texas
Panhandle and Oklahoma, today updated its drilling operations.
Michael D. Davis, interim Chief Executive Officer, stated, "This
press release updates our drilling activities since our previous
updates on April 17, 2012 and May 8, 2012. We are continuing to
execute an aggressive oil-focused drilling program with good
results in all of our plays. In particular, we are very pleased
with our new Cleveland sand horizontal wildcat discovery in the
Texas Panhandle which tested 438 BOE per day during completion.
Davis continued, "We are keenly aware of current uncertainty
regarding the world economy and falling oil prices. We know from
many years of oil industry experience that periods of uncertainty
often present significant opportunities for those who take a
responsible long term view."
BAKKEN AND THREE FORKS DRILLING
PROJECT
Credo has participated in 30 Bakken and Three Forks wells to
date. As shown in the tables below, 21 of the wells have been
completed and all are high rate producers. Eleven new producing
wells have been placed on production this fiscal year, and five
producers have been added since the Company's last update. Nine
wells are currently in various stages of drilling or completion,
and another nine wells are on the drilling schedule for the
remainder of fiscal 2012. This activity brings the Company's
expected Bakken and Three Forks well count to 39 by fiscal year
end. Based on drilling activity on the Fort Berthold Reservation,
the Company expects additional wells to be added to this year's
drilling schedule.
Producing—21 Wells
(Average 8.1% Working Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
IP BOEPD |
Fort Berthold 147-94-3A-10-1H |
PetroHunt |
Bakken |
18.75% |
1,285 |
GoodBear 21-14H |
Marathon |
Bakken |
14.61% |
1,280 |
GoodBear 31-14H |
Marathon |
Bakken |
14.61% |
1,357 |
Fort Berthold 148-94-17D 1-H |
PetroHunt |
Bakken |
10.00% |
1,486 |
Fort Berthold 148-94-17D 2H |
PetroHunt |
Three Forks |
10.00% |
1,697 |
Sorenson B-155-94-35-26-H1 |
Hess |
Bakken |
6.25% |
908 |
Sorenson B-155-94-35-26-H2 |
Hess |
Bakken |
6.25% |
1,292 |
Weisz 11-14-1H |
Brigham |
Bakken |
6.05% |
2,278 |
MHA 1-32-31H-150-90 |
QEP |
Bakken |
3.57% |
1,520 |
State of ND 10-3H |
WPX |
Bakken |
3.13% |
2,141 |
FBIR Beaks 24X-08 |
XTO |
Bakken |
3.13% |
1,168 |
Debbie Baklenko 12-26H |
Marathon |
Bakken |
1.56% |
1,352 |
Mary R. Smith 5-8H |
WPX |
Bakken |
1.56% |
964 |
Ethan Hall 6B-31-30-1H |
Enerplus |
Bakken |
1.48% |
3,732 |
Spotted Rabbit 14-23H |
WPX |
Bakken |
1.17% |
1,524 |
Fort Berthold 151-94-26B-35-1H |
PetroHunt |
Bakken |
0.63% |
2,937 |
Fort Berthold
148-95-23D-14-1H(1) |
PetroHunt |
Three Forks |
20.05% |
1,569 |
FBIR Black Medicine
24X-21(1) |
XTO |
Bakken |
3.13% |
2,153 |
Fort Berthold
148-95-26A-35-1H(1) |
PetroHunt |
Bakken |
6.01% |
1,697 |
Fort Berthold
148-94-30A-31-1H(1) |
PetroHunt |
Three Forks |
19.37% |
Pending |
Fort Berthold
148-94-30A-31-2H(1) |
PetroHunt |
Three Forks |
19.37% |
Pending |
|
|
|
|
|
(1) New producing well since
last Bakken and Three Forks press release on April 17, 2012. |
|
Drilling or
Completing—9 Wells (Average 10.2% Working Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
Status |
Fort Berthold 152-93-18B-19-1H |
PetroHunt |
Three Forks |
12.99% |
Completing |
Fort Berthold 148-95-22D-15-1H |
PetroHunt |
Bakken |
12.24% |
Completing |
Goodbird 36-25 HC |
WPX |
Bakken |
1.56% |
Completing |
Fort Berthold
152-93-18B-19-2H(2) |
PetroHunt |
Bakken |
12.99% |
Completing |
Fettig 6-7 HC |
WPX |
Bakken |
6.73% |
Drilling |
Fort Berthold 148-94-29B-32-1H(2)
(3) |
PetroHunt |
Three Forks |
18.75% |
Drilling |
Fort Berthold
152-93-18B-19-3H(2) |
PetroHunt |
Three Forks |
12.99% |
Drilling |
Linseth
149-95-12-13-1H(2) |
WPX |
Three Forks |
5.30% |
Drilling |
Emerald 148-95-03A-10H(2)
(3) |
Enerplus |
Bakken |
8.07% |
Drilling |
|
|
|
|
|
(2) New drilling wells
since last Bakken and Three Forks press release on April 17,
2012. |
(3) Participation election
pending. |
|
Scheduled
For Remainder of Fiscal Year—-9 Wells (Average 6.8% Working
Interest) |
|
|
|
|
|
Well Name |
Operator |
Formation |
WI |
Expected Spud
Date |
Fort Berthold 148-95-24C-13-1H |
PetroHunt |
Three Forks |
12.50% |
July |
Fettig 6-7 HB |
WPX |
Bakken |
6.73% |
July |
Independence 2-35HC(4)
(5) |
WPX |
Bakken |
3.13% |
July |
Fort Berthold 148-94-29B-32-2H |
PetroHunt |
Three Forks |
18.75% |
August |
MHA 150-5-32-31H(4) (5) |
QEP |
Bakken |
3.57% |
August |
WPX 148-92-30-31 |
WPX |
Bakken |
4.08% |
September |
QEP 150-92-26-27 |
QEP |
Bakken |
11.25% |
October |
Fort Berthold
151-94-26B-35-2H(4) |
PetroHunt |
Three Forks |
0.63% |
October |
Fort Berthold
151-94-26B-35-3H(4) |
PetroHunt |
Bakken |
0.63% |
October |
|
|
|
|
|
(4) New wells scheduled
since last Bakken and Three Forks press release on April 17,
2012. |
(5) Participation election
pending. |
TEXAS PANHANDLE DRILLING
PROJECT
In the Texas Panhandle, Credo owns 8,500 gross (2,400 net)
acres. The acreage is highly prospective for Tonkawa and Cleveland
horizontal drilling and Morrow vertical drilling. Each 640‑acre
spacing unit could ultimately contain two Tonkawa and two Cleveland
wells.
The Company recently completed its first horizontal Cleveland
well as a wildcat discovery. During completion, the well flowed at
the rate of 438 BOEPD, which is particularly exciting because it is
rare for a Cleveland well to flow under its own pressure without
artificial lift. The well was drilled on a 640 acre spacing unit
and reached a total measured depth of 13,568 feet. It was completed
in 14 stages using almost a million pounds of frac sand. Credo owns
a 25% working interest in the new discovery, and believes there is
potential for nine additional Cleveland locations on its
acreage.
The Company has also drilled two horizontal Tonkawa formation
wells on its Texas Panhandle acreage with an average 29% working
interest. In total, the Company has 17 potential horizontal
Cleveland and Tonkawa well locations and three vertical Morrow
formation well locations.
KANSAS AND NEBRASKA
DRILLING PROJECT
Credo currently owns approximately 147,000 gross (85,000 net)
acres in Kansas and Nebraska. To date, the Company has shot
approximately 200 square miles of 3-D seismic and has drilled
114 wells in Kansas and 19 wells in Nebraska, including seven
wells since its last update about a month ago. The Company is
continuing to achieve a drilling success rate of approximately 40%
together with excellent risk adjusted rates of return. Three
additional seismic surveys are planned for this year covering about
66 square miles.
Credo previously announced six new field discoveries in Kansas
and Nebraska and the potential for at least 25 offset
locations. Successful confirmation wells have now been drilled
on three of the recently announced new field discoveries. One
of the six discoveries, which initial tests indicated may be
significant, is expected to come on line in the next few weeks.
Davis continued, "We are very busy in Kansas and Nebraska where
we have drilled seven wells in the past month. This is a
scalable and repeatable project which has the best risk adjusted
rates of return of our various drilling projects.
"The Mississippian Limestone play has now expanded into our
operating areas of Kansas. Because this is one of the most
exciting horizontal drilling oil plays in the U.S., we are
beginning to see large independents, and even the super-majors,
take acreage positions and test drilling and production
concepts. Credo currently has about 36,000 gross (25,000 net)
acres which are prospective for the play. At least one large
independent is also preparing to test concept on drilling
horizontal wells in the Lansing Kansas City formation. If
these concepts prove viable, Credo is in an excellent position to
build a meaningful participation in the play."
About Credo Petroleum
Credo Petroleum Corporation is an independent oil and gas
exploration, development and production company based in Denver,
Colorado. The Company has significant operations in the
Williston Basin of North Dakota, Kansas, Nebraska, the Anadarko
Basin of the Texas Panhandle and northwest Oklahoma, and in
southern Oklahoma. Credo uses advanced technologies to
systematically explore for oil and gas and, through its patented
Calliope Gas Recovery System, to recover additional reserves from
largely depleted gas reservoirs.
On June 3, 2012, Credo entered into a definitive agreement
pursuant to which Forestar Group Inc. (NYSE:FOR) will acquire all
of the outstanding shares of Credo's common stock for
$14.50 per share, or approximately $146 million in the
aggregate. The transaction is expected to close in the second
half of 2012, and is subject to a number of customary closing
conditions, including approval of Credo's stockholders. The
transaction is not subject to approval by Forestar stockholders nor
is it subject to any financing conditions.
For more information, please visit our website at
www.credopetroleum.com or contact us at 303‑297‑2200.
Additional Information Regarding the Forestar
Transaction
In connection with the proposed transaction, Credo will file
with the Securities and Exchange Commission (the "SEC") a proxy
statement. The definitive proxy statement will be mailed to
stockholders of Credo. Credo urges investors to read the
proxy statement regarding the proposed transaction when it becomes
available because it will contain important information about the
proposed transaction. You may obtain a free copy of the proxy
statement (when available) and other related documents filed by
Credo with the SEC at the SEC's website at www.sec.gov. The
proxy statement (when it is available) may also be obtained for
free by accessing Credo's website at www.credopetroleum.com by
clicking on the link for "Investor Relations", then clicking on the
link for "Proxy Statement".
Participants in the Forestar Transaction
Credo and its directors, executive officers and certain other
members of management and employees may be deemed to be
participants in the solicitation of proxies from Credo's
stockholders in connection with the proposed transaction.
Information regarding the persons who may, under the rules of
the SEC, be considered participants in the solicitation of Credo's
stockholders in connection with the proposed transaction, including
the interests of such participants in the proposed transaction,
will be set forth in the proxy statement when it is filed with the
SEC. You can find information about Credo's executive
officers and directors in Credo's definitive proxy statement filed
with the SEC on February 28, 2012.
This press release includes certain statements that may be
deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as
amended. All statements included in this press release, other
than statements of historical facts, address matters that the
Company reasonably expects, believes or anticipates will or may
occur in the future. Such statements are subject to various
assumptions, risks and uncertainties, many of which are beyond the
control of the Company. Forward-looking statements or
information in this press release include, but are not limited to,
statements or information concerning our potential for additional
acreage, expected number of wells in a spacing unit, number of
anticipated well locations, expected well count by fiscal year-end,
expected new discoveries to be added to our drilling program and
expected transaction timing. Investors are cautioned that any
such statements are not guarantees of future performance and that
actual results or developments may differ materially from those
described in the forward-looking statements. Investors are
encouraged to read the "Forward-Looking Statements" and "Risk
Factors" sections included in the Company's Annual Report on
Form 10-K/A for more information. Although the Company
may from time to time voluntarily update its prior forward looking
statements, it disclaims any commitment to do so except as required
by securities laws.
CONTACT: Michael D. Davis
Chief Operating Officer
and CEO (Interim)
or
Alford B. Neely
Chief Financial Officer
303-297-2200
www.credopetroleum.com
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