CALGARY, Nov. 1, 2011 /CNW/ - (TSX-V: PFC) - PetroFrontier Corp. ("PetroFrontier") is very pleased to announce the spudding of its second horizontal well, "MacIntyre-2", in the Southern Georgina Basin, Australia on Friday October 28, 2011, where it is currently cementing the surface conductor. MacIntyre-2 is the first follow up well to PetroFrontier's recently drilled Baldwin-2Hst1 well. PetroFrontier has also been re-evaluating its current operational program due to the upcoming wet season in Northern Australia.
Drilling Program - "MacIntyre-2"
MacIntyre-2 is located in the northeastern corner of EP 127 in the Southern Georgina Basin approximately 60 km northwest of PetroFrontier's first location, Baldwin-2Hst1. After drilling this well, PetroFrontier will have earned a 75% working interest in EP 127 and is the operator.
As with Baldwin-2Hst1, the primary target in MacIntyre-2 is the unconventional Basal Arthur Creek "Hot Shale", with a conventional secondary target being the Dolomitic Shoal above the Basal Arthur Creek "Hot Shale".
PetroFrontier has re-designed and re-engineered the MacIntyre-2 well based on lessons learned from drilling the Baldwin-2Hst1 well. MacIntyre-2 will be drilled as a high angle (75 degrees) pilot hole to an estimated vertical depth of 900 meters, through the Arthur Creek "Hot Shale" unit and into the Thorntonian carbonate formation. The well will then be logged and drill stem tested ("DST") if well conditions permit.
The well will then be plugged back a short distance and then deviated horizontally into the Basal Arthur Creek "Hot Shale" for approximately 1,000 metres. Drilling is expected to take approximately four weeks. Once drilled to its total horizontal distance, MacIntyre-2 will be evaluated with an extended leak off test if well conditions permit. This test is expected to provide valuable reservoir data that will be used to calculate the most efficient frac program. This new well design is expected to result in greater drilling efficiencies and cost savings.
Modified Georgina Basin Exploration Program
In early 2011, management of PetroFrontier implemented an exploration program to drill horizontal wells at Baldwin-2 then MacIntyre-2 in the Basal Arthur Creek "Hot Shale", with the installation of a Packers Plus multi-stage frac completion string in each. These completions would be similar to those being used in many North American formations, such as the Bakken formation in Saskatchewan, North Dakota and Montana. With very high mobilization costs PetroFrontier's plan has been to mobilize the frac'ing equipment when the drilling of MacIntyre-2 was nearing completion. MacIntyre-2 would then be frac'ed, followed by Baldwin-2Hst1. Thereafter, all of the frac'ing and drilling equipment would be released before the onset of the wet season, as this is an area where the rains can effectively shut down operations for an extended time period.
Having experienced significant delays that occurred earlier this year due to the severe wet season experienced in Northern Australia, PetroFrontier's management has had to consider changes to this plan as the onset of this year's rains may occur within the next few weeks. Indeed, the Australian Government Bureau of Meteorology has forecast an increased probability of heavier than normal rains again this season.
As a result, PetroFrontier is evaluating the potential mobilization of a service rig to the Baldwin-2Hst1 well (about 3,000 km) to arrive approximately one week before drilling operations at the MacIntyre-2 well are completed. Management is also in discussions with the two available frac'ing companies in Australia to secure equipment for back-to-back fracs of the two wells for the corresponding time period.
However, readers are cautioned that a number of factors will come into play before this revised plan can be successfully implemented, including the availability and mobility of frac'ing equipment and the actual timing of the onset of the wet season. If this revised plan cannot be accomplished, it is probable that frac'ing and completion operations of the two wells may be delayed for as long as four months due to the wet season, potentially causing a delay of such operations until March of 2012.
PetroFrontier's capital program remains focused on exploratory drilling opportunities around existing wellbores and it will continue to invest in its extensive land base, with plans to acquire an additional 378 kilometers of 2D seismic in EP 103. Additional seismic acquisition is also planned in EP 104 and EP 128 (subject to Northern Territory government clearances) after the wet season in March 2012.
Current net working capital is approximately $35.75 million. After drilling and completing the two horizontal and two vertical wells and the current seismic acquisition program, PetroFrontier is expected to still have approximately $12.5-$15.0 million of working capital.
About PetroFrontier Corp.
PetroFrontier is an international oil and gas company engaged in the exploration, acquisition and development of both conventional and unconventional petroleum assets in Australia's Southern Georgina Basin. PetroFrontier's common shares are listed on the TSX Venture Exchange under the symbol "PFC". Founded in 2009, PetroFrontier is one of the first companies to undertake exploration in the Southern Georgina Basin in Australia's Northern Territory. PetroFrontier's head office is based in Calgary, Alberta and operations office is in Adelaide, South Australia.
This press release may contain forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of PetroFrontier, including, without limitation, statements pertaining to management's future plans and operations. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in PetroFrontier's disclosure documents on the SEDAR website at www.sedar.com. Any forward-looking statements are made as of the date of this release and, other than as required by applicable securities laws, PetroFrontier does not assume any obligation to update or revise them to reflect new events or circumstances.
Neither the 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.