SUCCESSFUL FRACTURE STIMULATION ON FOUR LEASES; ADDED OIL PRODUCTION COMING
IN SOUTH TEXAS FOR EMERALD BAY
CALGARY, Oct. 7 /CNW/ - Emerald Bay Energy Inc. (TSX Venture: EBY) (the "Company" or "Emerald Bay") is pleased to provide an operational update on activities in Texas.
SOUTH TEXAS
Completion operations are well underway on four oil leases in Medina County. Fracture stimulation operations took place during the past week and have now been completed on the Lenora Schmidt, JN Wilson, Clara Gray, and Oscar C leases in the Olmos formation. Pipelines and tank batteries have been installed. The production lifting equipment installation has now begun, starting with the Lenora Schmidt lease, and it is expected that we will have this lease on production by the end of this week. The equipment installation will then proceed to the remaining three leases and is expected to be completed as soon as October 15th.
During drilling operations, a second zone was encountered above the Olmos formation on multiple leases. The Escondido zone is producing in the area and shows great promise. While drilling through this zone, it produced a good oil "show" in the drilling fluids. The open-hole and cased-hole logs confirmed that the zone has hydrocarbon potential. We will now apply for Rule 37 drilling permits with The Texas Railroad Commission to directly offset these wells and dril a separate well bore and test the Escondido formation during this current month.
The Company anticipates the combined initial production rates to be in a range of 75 to 175 barrels of oil per day for the four leases in the Olmos zone (20 to 44 net to EBY). The discovery of the Escondidio zone could provide another 50 boepd gross (12 net to EBY) in these newly drilled wells.
"This is significant in that we could possibly have this Escondido zone productive in close to 100 existing well bores in Medina County that have never been produced. Phase 2 of the Medina County capital program will consist of seven development wells, and one exploratory well to test the Anacacho, Austin Chalk, Eagle Ford, and Buda formations," explained Shelby Beattie, Company President.
ABOUT EMERALD BAY
Emerald Bay Energy Inc., based in Calgary, is a junior oil and gas producer with production properties in Western Canada and South Texas. The common shares of Emerald Bay trade on the TSX Venture Exchange under the symbol "EBY". Please visit www.emeraldbayenergy.com.
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Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements --------------------------
This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe," "estimate," "project," "expect", "plan", "intend", "anticipates", "projects", "potential" or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Forward-looking statements are statements that are not historical facts.
Information inferred from the interpretation of drilling results may also be deemed to be forward looking statements, as it constitutes a prediction of what might be found to be present when and if a well is actually developed. BOE's may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 Bbl is based on energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. The reader is cautioned that assumptions used in the preparation of such information, which are considered reasonable by Emerald Bay at the time of preparation, may prove to be incorrect. Actual results achieved will vary from the information provided and the variations may be material. There is no representation by Emerald Bay that actual results achieved will be the same in whole or part as those indicated in the forward-looking statements. Forward-looking statements in this document include statements regarding the Company's exploration, drilling and development plans, the Company's expectations regarding the timing and success of such programs. In particular, forward-looking information in this news release includes, but is not limited to, statements with respect to: pipeline acquisitions and leasing; pipeline permits, pipeline construction, production estimates, drilling operations, completion operations, funding and development goals. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, level of activity, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information. Factors that could cause or contribute to such differences include, but are not limited to, fluctuations in the prices of oil and gas, uncertainties inherent in estimating quantities of oil and gas reserves and projecting future rates of production and timing of development activities, competition, operating risks, acquisition risks, liquidity and capital requirements, the effects of governmental regulation, adverse changes in the market for the Company's oil and gas production, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the applicable securities regulators.
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For further information: Emerald Bay President, Shelby D. Beattie, by telephone at (403) 262-6000 or by email at [email protected], or CHF Investor Relations: Robin Cook, Senior Account Manager, (416) 868-1079 x228, [email protected].
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