Second Wave Petroleum Inc. Provides Update on Judy Creek Beaverhill Lake Light Oil Drilling Program

Toronto Stock Exchange: SCS
83,986,964  Common Shares

CALGARY, Feb. 13, 2012 /CNW/ - Second Wave Petroleum Inc. (TSX:SCS) ("Second Wave" or the "Company") is pleased to provide an update on its Judy Creek Beaverhill Lake light oil drilling program.

Highlights

• Completed its first three well pad in the Beaverhill Lake formation with initial three day flow rates from its 15-22-063-10W5, 16-24-063-10W5 and 01-25-063-10W5 wells estimated at 1,470 bbl/d, 1,250 bbl/d and 1,450 bbl/d, respectively, of light oil. These three light oil wells were drilled from the surface location of 01-26-063-10W5 and Second Wave has a 40% working interest in each well.
  
  
• Completed the first of two wells from its surface pad located at 13-06-064-09W5 with the 13-01-064-10W5 well (40% working interest) testing at an initial flow rate estimated at 1,625 bbl/d of light oil over a seven day test period. The second well on the 13-06 pad has been drilled and is scheduled to be completed and flow tested in late February.
  
  
• Completed its 100% working interest 01-17-062-10W5 Beaverhill Lake light oil well in south Judy Creek with an initial two day flow test rate estimated at 800 bbl/d of light oil further delineating the Company's south Judy Creek land base. The Company is continuing to flow test the 01-17 well at the time of this release.
  
  
• Drilled, completed and brought on production its first successful exploration well on its south east Judy Creek land block with an initial five day flow test rate at its 10-05-063-09W5 well (40% working interest) estimated at 400 bbl/d of light oil.
  
  
• To date in Judy Creek, the Company has drilled, completed and brought on production 18.0 gross (9.0 net) horizontal Beaverhill Lake oil wells with 6.0 gross (3.0 net) wells waiting on completions and 3.0 gross (1.2 net) wells currently drilling. Average flow test rates to date have exceeded 600 bbl/d per well over test periods ranging from three to sixty days.

The Company cautions that test results are not necessarily indicative of long-term performance or ultimate recovery.

Operations Update

During the first quarter of 2012 the Company has been operating three drilling rigs dedicated to the Beaverhill Lake formation in Judy Creek. To date the Company has drilled, completed and brought on production 18.0 gross (9.0 net) horizontal Beaverhill Lake oil wells, with 6.0 gross (3.0 net) wells standing waiting on completions and 3.0 gross (1.2 net) wells currently being drilled. Average initial flow rates to date for the 18 completed wells have exceeded 600 bbl/d per well over test periods ranging from three to sixty days. Of these wells, 5.0 gross (2.6 net) Beaverhill Lake oil wells have been completed in 2012 and Second Wave is currently scheduled to complete an additional four wells per month for the remainder of 2012. Our accelerated completion schedule is the result of shorter production flow test periods on new wells as the Company has begun to accelerate its pipeline and well site construction schedules to accommodate an overall reduction in its cycle times and capital costs as it transitions to a full developmental drilling program in the Beaverhill Lake formation.

In the fourth quarter of 2011 the Company drilled its first three well pad in the Beaverhill Lake formation from the surface location of 01-26-063-10W5. Completion operations on this pad occurred in January of 2012 with initial three day flow test rates from its 15-22-063-10W5, 16-24-063-10W5 and 01-25-063-10W5 wells estimated at 1,470 bbl/d, 1,250 bbl/d and 1,450 bbl/d, respectively, of light oil. Second Wave holds a 40% working interest in these three light oil wells.

The Company cautions that short flow test results may not necessarily be indicative of long-term performance or ultimate recovery.

In February, the Company completed the first of two wells off of its multi-well pad located at the surface location of 13-06-064-09W5 with an initial seven day flow test rate from the 13-01-064-10W5 well (40% working interest) estimated at 1,625 bbl/d of light oil. The second well that was drilled off of this pad to the bottom hole location of 13-05-064-09W5 (40% working interest) is currently standing and is scheduled to be completed and flow tested in February.

Production from the 01-26-063-10W5 and the 13-06-064-09W5 pads have been pipelined connected to Second Wave's operated oil batteries at 08-24-063-10W5 and 04-31-063-10W5, respectively, with solution gas processed at the Company's operated gas plant located at 08-24-063-10W5. Initial production from these two pads is scheduled to occur in February after pumpjacks and surface facilities have been installed at the well sites. The Company expects gross initial production rates on the above noted four wells to be restricted at 225 bbl/d of light oil by surface pumping capacities and maximum rate limitations.

Results from the above noted four completed wells have met the Company's expectations and management believes further substantiate the Beaverhill Lake reservoir quality on the west side of  Second Wave's land base in Judy Creek.

In the south portion of its Judy Creek land base the Company has successfully completed 2.0 gross wells (1.4 net) with the 01-17-062-10W5 (100% working interest) and 10-05-063-09W5 (40% working interest) wells testing at initial flow rates over a two and five day period estimated at 800 bbl/d and 400 bbl/d, respectively, of light oil.

As a result of down hole mechanical issues the 10-05-063-09W5 (40% working interest) horizontal well was not fracture stimulated as down hole limitations required lower acid pumping rates and pressures. The 10-05 and 01-17 wells will come on production to single well battery's in the first quarter of 2012. The Company believes that both wells will have initial 30 day pumping production rates of 150 to 200 bbl/d of light oil. The Company is following up its success in this area with an additional two wells at 05-07-063-09W5 and 07-09-063-09W5 which are standing waiting on completion and a third well drilling at 13-30-062-09W5. The Company holds a 40% working interest in all three wells and expects them to be completed and on production in the first half of 2012.

Results from the 10-05 and 01-17 wells have met the Company's expectations and have set-up an additional 10 to 20 gross (33 to 100% working interest) section light oil development program in the Company's south Judy Creek land block. The Company has an active drilling program in this area planned for 2012 with 5 to 10 additional Beaverhill Lake horizontal oil wells forecast to be drilled in 2012.

Outlook

The Company continues to gain momentum with its light oil Beaverhill Lake drilling program in Judy Creek. Corporate production and netbacks in the fourth quarter of 2011 are estimated at 2,175 boe/d (77% oil and natural gas liquids) and $49.00 per boe, respectively, based on unaudited financial and operating data. The Company's Beaverhill Lake production is estimated to have increased to approximately 1,200 boe/d in the fourth quarter from 484 boe/d in the third quarter. Operating netbacks on its Beaverhill Lake production exceeded $75.00 per boe in the fourth quarter based on unaudited financial and operating data.

The Company estimates its current production based on field estimates to be approximately 3,000 boe/d (80% oil and natural gas liquids). For the remainder of the first half of 2012 the Company expects its corporate production to fluctuate between a base level of 2,500 and 3,500 boe/d (80% oil and natural gas liquids) depending on a number of variables including frac schedules, flow test lengths, pipeline construction and single well battery construction cycle times as well as general spring break-up related delays.

Second Wave believes it is positioned to meet its previously announced 2012 production exit target of 5,000 boe/d (80% oil and natural gas liquids) with its Beaverhill Lake production expecting to reach approximately 4,000 boe/d by year end. The Company anticipates drilling 39 gross (16.8 net) Beaverhill Lake light oil horizontal wells in 2012. As additional light oil volumes come on production in 2012 the Company expects its operating netbacks to continue to increase throughout the remainder of the year.

The Company anticipates providing a further operational update as year-end financial and reserve information is released later in the first quarter of 2012.

READER ADVISORIES

Barrels of Oil Equivalent (BOEs).  The term BOE refers to barrel of oil equivalent, with natural gas converted to crude oil equivalent at a ratio of six thousand cubic feet to one barrel.  BOEs may be misleading, particularly if used in isolation.  A BOE conversion ratio of six mcf (six thousand cubic feet) to one bbl (one barrel) is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Forward-Looking Statements.  This news release contains forward-looking statements as to the Company's internal projections, expectations and beliefs relating to future events or circumstances. Forward-looking statements are typically (but not necessarily) identified by words such as "anticipate", "believe", "budget", "estimate", "expect", "plan", "intend", "potential", "may", "will", "should" or similar words suggesting future outcomes. Although the Company believes that these forward-looking statements are reasonable, undue reliance should not be placed on them as they are subject to known and unknown risks and uncertainties, many of which are beyond the Company's control. Forward-looking statements are not guarantees of future outcomes. There can be no assurance that the plans, intentions or expectations contained in the forward-looking statements or upon which they are based will in fact occur or be realized, and actual results may differ from those expressed or implied in the forward-looking statements. The difference may be material.

Second Wave is subject to the inherent risks associated with the exploration, development, exploitation and production of oil and gas. More particularly, material risk factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in this news release include: adverse changes in commodity prices, interest rates or currency exchange rates; accessibility of capital when required and on acceptable terms; lower than expected production of crude oil and natural gas; production delays; lower than expected reserve volumes on the Company's properties; increased operating costs; ability to attract and retain qualified personnel or to secure drilling rigs and other services on acceptable terms; competition for labour, equipment and materials necessary to advance the Company's projects; unforeseen engineering, environmental or geological problems; ability to obtain all required regulatory approvals on a timely basis and on satisfactory terms; and changes in laws and governmental regulations (including with respect to taxes and royalties). This list is not exhaustive. Readers should also review the risk factors described in other documents filed by the Company from time to time with securities regulatory authorities in Canada, including its most recent annual information form, copies of which are available electronically at www.sedar.com and at www.secondwavepetroleum.com.

Specific forward-looking statements contained in this news release include statements regarding: the Company's ability to internally process all of its Beaverhill Lake emulsion by the end of 2011 and the consequential reduction in operating costs; the number of wells expected to be completed in 2011 and standing awaiting completion at year end; the estimated production rate for the fourth quarter of 2011; and average and exiting production rates forecast for 2012.  In making such forward-looking statements, Second Wave has made various assumptions regarding, among other things: the accuracy of geological and geophysical data and interpretations of that data; future oil and natural gas prices; future capital requirements; future exchange rates; the accessibility and cost of capital (including credit); the Company's ability to economically produce oil and gas from its properties and the timing and cost to do so; and its ability to obtain qualified staff, equipment and supplies in a timely and cost-efficient manner.

The forward-looking statements included herein are made as of the date of this news release and Second Wave undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by securities laws.

Colin B. Witwer, President and CEO
Randy Denecky, VP, Finance and CFO

Second Wave Petroleum Inc.
Calgary, Alberta, Canada
Telephone: [phone]
Email: [email protected]
Web:  www.secondwavepetroleum.com