CALGARY, ALBERTA — (Marketwire) — 07/16/12 — Border Petroleum Corp. (“Border” or the “Corporation”) (TSX VENTURE: BOR) is pleased to announce initial results from its first two Slave Point horizontal wells in the Red Earth area. The wells were drilled to a vertical depth of 1,400 metres with minimum 500 metre horizontal legs and fracture stimulated utilizing an average of 10 stages. The wells were drilled on 18,720 acres of Loon River Cree Nation exploration rights (the “Loon Block”) granted under a federal government permit to Border on November 30, 2011. The two wells, which satisfied Border–s first year drilling requirements under the permit, were drilled in proximity to infrastructure and into a gross pay thickness of 18 metres. Gross pay thicknesses on the Loon Block reach up to approximately 30 metres.
To date, based on field reporting, the peak seven days of initial production from these short leg horizontal wells averaged 159 bopd, with a single day peak rate average of 175 bopd, and 30 days of initial production (“30 day IP”) averaging 102 bopd or 10 bopd per frac. 30 day IP and short-term rates are not necessarily indicative of long-term performance or of ultimate recovery.
Slave Point horizontal wells in the Red Earth area typically reach their maximum oil rates 30 – 120 production days after start-up (the “clean-up period”). During the clean-up period, rates fluctuate as fluid utilized in the fracture stimulation process (“frac fluid”) is recovered and inflow stabilizes. As frac fluid is recovered, oil production typically increases. This trend is reflected in Border–s well results as illustrated in the following table:
The above results have validated Border–s strategy of utilizing short horizontal wells to de-risk the Loon Block. Capital exposure and operational risk were minimized while valuable information was obtained to assist in future development. Having achieved a 30 day IP of 10 bopd per frac, Border now intends to take advantage of the efficiencies related to drilling long leg horizontal wells incorporating a minimum of 20 frac stages. In this regard, Border has initiated licensing its first long leg horizontal well which it plans to commence in the fall. The well will be funded by cash on hand and funds generated by current assets.
SPROULE RESOURCE ASSESSMENT OF BORDER INTERESTS IN GREATER RED EARTH AREA
Border engaged Sproule Associates Ltd. (“Sproule”) to conduct an assessment of its Contingent Slave Point Oil Resources (the “Sproule Resource Assessment”) covering 20,000 gross (20,000 net) acres of the Corporation–s interests in the Greater Red Earth Area effective May 31, 2012. The Sproule Resource Assessment was prepared in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGEH”) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”).
Sproule–s estimate of Discovered Oil Initially in Place (“DOIIP”) on Border–s Slave Point interests is 316 MMbbl (all volumes are net to Border). Sproule–s best estimate of Contingent Slave Point Oil Resources as of May 31, 2012 is 40.4 MMbbls with a low estimate of 21.5 MMbbls and a high estimate of 65.1 MMbbls.
The Sproule Resource Assessment is based on a development plan that consists of one 1,400 metre long horizontal well per quarter section utilizing multi-stage fracture stimulation completions, and does not assign any Contingent Resources or reserves for secondary recovery schemes or down spacing of drill spacing units.
FILING OF FINANCIALS, ANNUAL INFORMATION FORM AND RESERVES DATA
Border is also pleased to report its financial results for the year ended March 31, 2012. The audited financial statements and Management–s Discussion & Analysis (“MD&A”) were filed on SEDAR on July 16, 2012. The Corporation is also pleased to announce that pursuant to NI 51-101 it has filed its Form 51-101F1 Statement of Reserves Data and Other Oil and Gas Information, Form 51-101F2 Report on Reserves Data by Independent Qualified Reserves Evaluator and Form 51-101F3 Report of Management and Directors on Oil and Gas Disclosure. Border–s Annual Information Form for the year ended March 31, 2012 has also been filed on SEDAR on July 16, 2012. A copy of the annual and NI 51-101 filings of the Corporation are available for viewing at .
HIGHLIGHTS OF THE YEAR ENDED MARCH 31, 2012
The following are the highlights of Border–s operations for the year ended March 31, 2012:
FINANCIAL OVERVIEW
Certain selected financial and operational information for the year ended March 31, 2012 is set out below and should be read in conjunction with the Corporation–s audited consolidated financial statements and related MD&A. The following table provides a summary of key financial results.
OUTLOOK
Border has assembled one of the largest contiguous land interests in the developing Slave Point play with its 18,720 acre permit on the Loon Block. The Loon Block contains approximately 120 potential locations based on quarter section spacing which Border operates 100 percent.
Based on the initial results of its first two Slave Point wells as detailed above, Border is moving forward with its development plan focused exclusively on its Slave Point light oil opportunities at Red Earth. In this regard, Border plans to drill one to two more wells over the balance of the year with its next well planned for this fall. Capital expenditures with respect to the next phase of development are expected to be funded by cash and funds generated from current assets.
ANNUAL GENERAL MEETING
Border–s Annual General and Special Meeting is scheduled for 10:00 am on September 13, 2012 at the offices of Burstall Winger LLP, located at 1600, 333 – 7th Avenue S.W., Calgary, Alberta.
Forward-Looking Statements
The forward-looking statements contained in this document are based on certain key expectations and assumptions made by Border. Although Border believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because Border can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the failure to obtain necessary regulatory approvals, risks associated with the oil and gas industry in general (e.g., operational risks in development, exploration and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to production, costs and expenses, and health, safety and environmental risks), commodity price and exchange rate fluctuations and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. 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 Border–s disclosure documents on the SEDAR website at .
The forward-looking statements contained in this document are made as of the date hereof and Border undertakes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws.
BOE
BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf:1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
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Contacts:
Border Petroleum Corp.
Kelly Kimbley
President & CEO
(403) 538-8450
(403) 444-5042 (FAX)