Blast Energy Services Jets Horizontally in the Austin Chalk
January 06 2009 - 8:00AM
PR Newswire (US)
HOUSTON, Jan. 6 /PRNewswire-FirstCall/ -- Blast Energy Services,
Inc. (OTC Bulletin Board: BESV) announced today that its lateral
jetting rig successfully completed several separate horizontal
penetrations in a well operated by Reliance Oil and Gas, in the
Austin Chalk play outside of Luling, Texas. At a depth of
approximately 2,500 feet and using a 15% acid-based solution, the
rig drilled multiple horizontal laterals into the target zones up
to ninety feet in length. "We drilled at a deeper depth and
achieved almost double the lateral length in multiple zones
compared to the wells tested outside of Abilene last fall. This
success represents an important step toward the full
commercialization of our horizontal completion technology," said
John O'Keefe, President and CEO of Blast. The laterals were cut at
a rate of approximately 1.5 feet per minute using water, acid and
certain other fluids under a pressure of approximately 3,000 psi.
Additionally, the laterals were jetted at three separate depths
within two targeted producing sand sections. Oil was visible in the
retention pits containing the circulated fluids and the well
experienced a few kicks from gas pressure after the laterals were
drilled. Lateral jetting on a second Austin Chalk well for Reliance
is expected to commence later this week. This first well in the
Austin Chalk achieved a total of eleven laterals in the upper,
middle and lower zones. The lateral extent was deliberately
constrained by a 90 foot flexible hose, which was employed to avoid
certain additional Texas permitting requirements when drilling
horizontally longer than 100 feet. The acid solution will remain in
the lateral formations for several weeks before well fracturing
operations commence. Following the frac job, Reliance will open the
wells up for production and capture their initial production flow
rates. Blast management believes its lateral jetting service will
provide dramatically higher initial flow rates than conventional
well completions in the area. If the results of the two test wells
in the Austin Chalk achieve expected flow rates, Reliance has
already received funding for a new seven-well project and will
receive funding for the drilling of an additional 18 wells in the
area under the planned Austin Chalk drilling program. Under the
terms of the Blast revenue sharing agreement, Reliance will operate
the lateral jetting rig at no cost to Blast and will share 50% of
the revenues generated from such rig. The rig has been contracted
at a gross rate of $40,000 per well in the Austin Chalk program. In
addition to validating the application of this technology
specifically in the formations of the Austin Chalk, the success of
this technology will allow Blast to begin actively marketing its
lateral jetting service to other operators in the area for the
Chalk and other horizons. During October 2008, Blast completed two
separate 50 feet laterals in two gas wells near Abilene, Texas and
was able to increase gas flow five-fold and twelve-fold
respectively. Meanwhile, Blast has already begun the capture of
additional drilling opportunities, including the execution of a
recent Master Service Agreement with Resource Energy Technologies
in Kentucky where the lateral drilling process may allow producers
to significantly increase their production flow rates of natural
gas from limestone formations similar to the Austin Chalk. Website
address http://www.blastenergyservices.com/ Safe Harbor Statement
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the "Act"). In particular, when used in the preceding discussion,
the words "believes," "expects," "intends," "plans," "anticipates,"
or "may," and similar conditional expressions are intended to
identify forward-looking statements within the meaning of the Act,
and are subject to the safe harbor created by the Act. Any
statements made in this news release other than those of historical
fact, about an action, event or development, are forward-looking
statements. Forward looking statements involve known and unknown
risks and uncertainties, which may cause the Company's actual
results in future periods to be materially different from any
future performance that may be suggested in this release. Such
factors may include risk factors including but not limited to: the
likelihood that the customer lawsuits result in meaningful
proceeds, the ability to raise necessary capital to fund growth,
adequate liquidity to manage operations and debt obligations, the
introduction of new services, commercial acceptance and viability
of new services, fluctuations in customer demand and commitments,
pricing and competition, reliance upon lenders, contractors and
vendors, the ability of Blast Energy Services' customers to pay for
our services, together with such other risk factors as may be
included in the Company's filings on its periodic filings on Form
10-K, 10-Q, and other current reports. Blast Energy Services, Inc.
takes no obligation to update or correct forward-looking
statements, and also takes no obligation to update or correct
information prepared by third parties that are not paid for by
Blast. DATASOURCE: Blast Energy Services, Inc. CONTACT: John
MacDonald of Blast Energy Services, Inc., +1-281-453-2888, or
+1-713-725-9244, Web Site: http://www.blastenergyservices.com/
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