Fram Exploration confirms first successful horizontal oil well in Whitewater, USA
Fram Exploration ASA today announced that it has completed its Siminoe 32-2-L horizontal well in Mesa County, Colorado, USA as an oil producer in the Dakota formation. The initial well is expected to produce at rates in excess of 60 barrels of oil per day once the well is cleaned up, which will generate an economic payback of investment of less than 12 months.
“We are very encouraged by the confirmation of oil reserves from the Siminoe well” said Patrick Keenan, group president and CEO of Fram Exploration. “The well results are in line with expectations and confirm the reservoir model we have developed to identify and produce oil from the Dakota formation in Whitewater.”
The well is located in the Whitewater Unit, the largest federal production unit in the state of Colorado, in which Fram has over 47,000 net acres under lease. The well is a step out to the Mansur well and reached TD at 3,887 feet, intersecting a total of 260 feet of the Dakota formation. Three high quality channel sands totaling 150 feet in thickness were identified and perforated. The Mansur well, which was completed and placed on pump in June 2010, has been producing at 30 barrels per day on a steady basis with no loss of reservoir pressure and no water intrusion. The Mansur has accumulated production volumes of approximately 9,000 barrels of oil and 20 million cubic feet of gas from a vertically drilled well.
The Company plans to continue to develop its oil reserves in Whitewater by drilling a series of high-angle/horizontal wells to maximize the exposure to the reservoir and increase production rates compared to vertical wells. This is a new concept for development of the Whitewater unit. The oil will be trucked to a pipeline point, which will result in a price realization of about $12 per barrel less than West Texas intermediate crude price.
Fram acquired a 95.6 per cent working interest in the Whitewater unit during 2008 and 2009 originally to develop natural gas reserves in the Dakota formation. The strategy was changed upon finding an oil leg to the reservoir after evaluating the Mansur well. The strategy is now changed to develop the oil reserves first and come back to the gas development once U.S. natural gas prices become more attractive on a relative basis.
Fram is currently a private company but has applied for listing on the Oslo Axess Exchange.
For further information on the offering and listing, please refer to the Company’s stock exchange notice of 3 June 2011 and the prospectus.
ABG Sundal Collier and Arctic Securities are acting as joint lead managers and joint bookrunners in connection with the initial public offering. The prospectus is available from today at the Company´s web page www.framexploration.no, and, for Norwegian persons resident in Norway, at the managers´ web pages www.abgsc.no and www.arcticsec.no. The prospectus is also available at the business office of ABG Sundal Collier Norge ASA and Arctic Securities ASA.
About Fram Exploration:
Fram Exploration is an international E&P company with oil & gas assets onshore in the states of Colorado and North Dakota in the United States and in the Republic of Trinidad and Tobago. The Company has significant worldwide industry experience in the technical disciplines of geology, geophysics, reservoir modeling, petroleum engineering, operations management, drilling, and completion expertise. The Company targets undervalued assets in regions with politically stable regimes and attractive fiscal terms. For more details see www.framexploration.no
Important information
The information included in this press release contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain additional risks and uncertainties including but not limited to: the supply and demand for oil and US natural gas, cost of drilling services, the ability to raise necessary capital to fund growth, adequate liquidity to manage operations and debt obligations, reliance upon lenders, contractors and vendors, unpredictable changes in governmental regulations affecting our markets and extreme weather conditions together with such other risk factors as may be included in the Company's filings or its periodic filings.
For a further description of other relevant risk factors we refer to the prospectus. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business.
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