Journey Energy Inc. Highlights Encouraging Test Results and Provides Update on East Duvernay Resource Play

CALGARY, April 15, 2019 /CNW/ - Journey Energy Inc. (JOY – TSX) ("Journey" or the "Company") is pleased to provide an update on our Joint Venture with Kiwetinohk Resources Corp. ("Kiwetinohk") in the East Duvernay, including the encouraging test rates achieved by the first two commitment wells.

East Duvernay Joint Venture Operational Update

Since entering into the Joint Venture arrangement on August 29^th, 2018, Kiwetinohk and Journey have been actively advancing the development of the East Duvernay property including:

• Expansion of the Joint Venture Duvernay land position to over 105,000 gross acres;
  
  
• Drilled, completed, and achieved encouraging test rates from the first two commitment wells;
  
  
• Initiated operations on the first well of the five well option phase with the completion and current testing of a short length standing cased well drilled by a previous operator;
  
  
• Drilled and rig released a second option well on March 31, 2019 with completion and testing operations anticipated to commence in the second quarter; and
  
  
• Licensed option wells three and four at 100/16-12-044-04W5/00 and 100/12-07-042-03W5/00 respectively.

Two Well Commitment Phase Update

Kiwetinohk has drilled, completed and flow tested the following wells:

• Commitment Well #1: HZ 102/16-15-042-03W5/00 (6,500m TMD; 3,590m horizontal length)
• Commitment Well #2: HZ 102/15-31-042-03W5/00 (6,352m TMD; 3,413m horizontal length)

Further details on the drilling and completion of the commitment wells are included in Journey's year-end press release dated February 27th, 2019.

Commitment Wells Flow Test Results

Cautionary note: Pressure transient analysis or well-test interpretation have not been carried out and therefore the below data should be considered preliminary until such analysis or interpretation has been completed. The test results are not necessarily indicative of long-term performance or of ultimate recovery.

The wells were initially opened to flow up 4½ inch production casing for a cleanup period of 20.4 days (489.5 hours) from March 2, 2019 to March 22, 2019.  By design, the wells flowed at highly restricted rates in order to bleed off some load fluid while allowing the fracs to close slowly thereby minimizing sand production and improving the longer term performance of the wells. To this end, neither well has produced any appreciable sand.

Water cuts declined throughout the cleanup phase from 100% to final levels of 74% and 65% for 16-15 and 15-31 respectively.  All produced water is considered to be load fluid and at the end of the test approximately 4% of load fluid had been recovered from both wells. 

Initial clean-up flow summaries by well are as follows:

Well	102/16-15-042-03W5/00	102/15-31-042-03W5/00
Flowing Time (hours)	489.5	489.5
Oil (bbls)	4,216	6,463
Water (bbls)	33,859	26,958
Fluid (bbls)	38,076	33,421
Natural gas (mmcf)	6.6	11.1
Load Fluid Recovered (%)	4.1%	4.2%

On March 22, 2019 the clean-up flow was terminated and the wells were equipped with production tubing, and subsequently opened for main flow testing up the tubing.  Rates reported herein reflect the 48 hour period from April 13, 2019 at 6:00 am to April 15, 2019 at 6:00 am.  Cumulative production shown below includes production from the clean-up flow.  As seen during the clean-up phase, water cuts on both wells continued to decline throughout the testing period.

Journey considers these preliminary results to meet or exceed its expectations.  Although preliminary in nature, the results support our hypothesis that a significant portion of the joint venture acreage is within the oil window in a highly productive area of the East Duvernay.

Main Flow Summary:

Well	102/16-15-042-03W5/00	102/15-31-042-03W5/00
Total to Date:
Flowing Time (hours)	735	735
Oil (bbls)	10,234	13,620
Water (bbls)	43,916	34,428
Fluid (bbls)	54,150	48,048
Natural gas (mmcf)	15.6	25.1
Load Fluid Recovered (%)	5.3%	5.3%
April 13-15 (48 hours)
Oil (bbls/d)	968	1,017
Natural gas (mcf/d)	1,507	2,270
GOR (cf/bbl)	1,556	2,232
Water cut (%)	55%	53%
API Gravity (º)	46-48º	45-48º
Choke Size (mm)	11.11	11.11
Flowing Pressure (kPag)	8,443	10,766

Both of these wells share the same surface lease and will be equipped and connected to the same multi-well oil battery.  The natural gas will be tied into Journey's existing gas gathering system and will be processed at the Tidewater operated 1-4-42-3W5 Gilby Gas Plant, of which Journey owns a 43.3% working interest.  Journey anticipates these wells to be on-production in early May.  The Company has a 3.75% GORR on 100% of the production from these two commitment wells with an option to convert the GORR to a 29.17% working interest after payout of 58.33% of the capital has been recovered from each well.

Five Well Option Phase Update

Kiwetinohk is currently active on the following two wells:

Option Well #1:   HZ 102/11-09-044-03W5/00 (1,400m horizontal length)

Kiwetinohk has re-entered this standing, cased well, extended the well 200m and performed two 100 tonne Frac's on the extended portion.  Kiwetinohk has now Fraced the original 1,200m existing lateral section with 1,400 tonnes of proppant, and the well is currently on flowback to test.

Option Well #2:   HZ 100/13-02-042-04W5/00 (6,072m TMD; 3,056m horizontal length)

Kiwetinohk spud this well on February 26^th with a rig release date of March 31^st.  Prior to drilling the horizontal portion of the well, the vertical portion of the well at 8-16-042-03W5 was logged through the Duvernay. This well is 10 km away from the 6-28-042-03W5 stratigraphic test well at the heel of the commitment wells. The logs confirmed the presence of a Duvernay zone in excess of 30 m in thickness, and significantly higher interpreted porosity than the 6-28 strat well. The horizontal lateral length in the Duvernay is approximately 3,056m and Journey anticipates completion and flow-testing operations to commence in the second quarter.

Option Well Licensing

Kiwetinohk has licensed the following Option Wells:

100/16-12-044-04W5/00
100/12-07-042-03W5/00

Journey anticipates Kiwetinohk will drill these Option Wells in Q2 & Q3 of 2019.

Journey looks forward to updating our shareholders on future activities in the East Duvernay as further information becomes available.

About the Company 

Journey is a Canadian exploration and production company focused on oil-weighted operations in western Canada.  Journey's strategy is to grow its production base by drilling on its existing core lands, implementing waterflood projects, and by executing on accretive acquisitions.  Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods. Journey is also in the early phases of advancing development of an unconventional shale resource play in the oil window of the Duvernay, in the western shale basin of our central core area.

FORWARD LOOKING STATEMENTS AND OTHER ADVISORIES

Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, which involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Journey, including, without limitation, those listed under "Risk Factors" and "Forward Looking Statements" in the Annual Information Form filed on www.SEDAR.com on March 27, 2019. Forward-looking information may relate to Journey's future outlook and anticipated events or results and may include statements regarding the business strategy and plans and objectives. Particularly, forward-looking information in this press release includes, but is not limited to, information concerning Journey's drilling and other operational plans, the drilling plans of Journey's joint venture partner, production rates, and long-term objectives. Journey cautions investors in Journey's securities about important factors that could cause Journey's actual results to differ materially from those projected in any forward-looking statements included in this press release. Forward-looking information contained in this press release about Journey's prospective funds flows and financial position is based on assumptions about future events, including economic conditions and courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that information regarding Journey's financial outlook should not be used for purposes other than those disclosed herein. Forward-looking information contained in this press release is based on current estimates, expectations and projections, which Journey believes to be reasonable as of the current date. No assurance can be given that the expectations set out herein will prove to be correct and accordingly, you should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as required by applicable securities law.

Readers are cautioned that the above list of risks and factors are not intended to be exhaustive. Additional information on these and other factors that could affect operating and financial results are, or will be, included in reports filed with the applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

Barrel of Oil Equivalents

Where amounts are expressed in a barrel of oil equivalent ("BOE"), or barrel of oil equivalent per day ("BOE/d"), natural gas volumes have been converted to barrels of oil equivalent at six (6) thousand cubic feet ("Mcf") to one (1) barrel. Use of the term BOE may be misleading particularly if used in isolation. The BOE conversion ratio of 6 Mcf to 1 barrel ("Bbl") of oil or natural gas liquids is based on an energy equivalency conversion methodology primarily applicable at the burner tip, and does not represent a value equivalency at the wellhead. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

Oil and Gas Measures and Metrics

The Company uses the following metrics in assessing its performance and comparing itself to other companies in the oil and gas industry. These terms do not have a standardized meaning and therefore may not be comparable with the calculation of similar measures.by other companies:

1)	Corporate Decline is the rate at which production from a grouping of assets falls from the beginning of a fiscal year to the end of that year
2)	IP 30 is the average daily production rate of a well in its first full calendar month of production expressed in boe's

Select Abbreviations and Definitions

bbl	barrel
bbls	barrels
GOR	gas to oil ratio
GORR	gross over-riding royalty
kPaG	Kilopascal guage
m	meters
Mbbls	Thousand barrels
MMBtu	million British thermal units
NGLs	natural gas liquids
Mcf	thousand cubic feet at standard conditions
Mmcf	million cubic feet at standard conditions
Mmcf/d	million cubic feet per day at standard conditions
Boe	barrel of oil equivalent
Mboe	thousand boe
$M	thousands of dollars

"Frac" means hydraulic fracturing, which is the process of creating fractures in rock formations by injecting sand and/or fluids at high pressures into their cracks to force them to open further and thereby allowing more oil and natural gas to flow out of the rock formations and into the wellbore.

No securities regulatory authority has either approved or disapproved of the contents of this press release.

SOURCE Journey Energy Inc.

Alex G. Verge, President and Chief Executive Officer, 403-303-3232, [email protected]; Gerry Gilewicz, Chief Financial Officer, 403-303-3238, [email protected]; Journey Energy Inc., 700, 517 - 10th Avenue SW, Calgary, AB T2R 0A8, 403-294-1635, www.journeyenergy.ca