VANCOUVER, BRITISH COLUMBIA — (Marketwire) — 07/14/11 — Nextraction Energy Corp. (TSX VENTURE: NE) (“Nextraction” or the “Company”), is pleased to announce it has substantially increased its leasehold position in the Provost Viking A oil pool by 92%, increasing its net acreage position from 1.625 to 3.125 sections (1040 acres to 2000 acres). Nextraction acquired one section at a 100% working interest (640 acres net to Nextraction) at a cost of $701,584, and one section at a 50% working interest (320 acres net to Nextraction) at a cost of $401,088. The two newly acquired sections are contiguous to each other and are one mile from the Company–s existing 50/50 joint venture acreage, allowing for the potential to use existing infrastructure. The acquisition essentially doubles the Company–s drilling inventory of horizontal locations up to 36 wells. Nextraction has identified 21 locations on 400 meter spacing whereby the Company could drill at least 4 wells owning 100% interest, and own a 50% interest in 17 locations (resulting in a further 8.5 net wells). In addition, another 15 locations may be drilled at a 50% interest (7.5 net wells), should down spacing be warranted.
The acreage is also prospective for light oil production from the Dina formation that is approximately 150 meters below the Viking formation. A historical well on the acreage produced 18 Mbbls of oil from the Dina formation.
The Company is also pleased to announce that it participated in the successful re-completion of a well on its existing acreage. The well had not been previously fracture stimulated, so the well was fractured using the same technique the Company plans to use on its first horizontal well. Prior to re-completion of the well in mid-June, it produced three barrels of oil per day and is now currently producing 29 barrels of light oil per day, a ten-fold increase. Payout is projected at three months.
The Company is encouraged by the results of the frac as it confirms the high productivity potential of the Company–s acreage. The well has been producing for two years and is located directly between two wells that have cumulatively produced 520 Mbbls to date and continue to produce 20 bbls per day of oil. Reservoir pressure measured after completion was near original pressure, suggesting little depletion. The high production rates from the well are consistent with the high pressure and indicate good quality reservoir, as expected. The Company is currently drilling its first horizontal well in the pool offsetting these wells and plans to multi-stage fracture this first horizontal well in the Viking zone in the coming days. The Company also plans to drill a second horizontal well on this joint venture acreage in the third quarter of 2011.
Mark S. Dolar, President & CEO of Nextraction, comments that “We value the Crown leases acquired yesterday as a strategic asset to our Company–s growth. We believe the acreage to be very prospective for a multi-well development program and will expand our ability to focus on developing the Viking formation for value added reserves. With our experience and expertise in developing the Viking sand by horizontal drilling and multi-stage fracturing, we see this project as an excellent way to add significant oil reserves as we move towards our goal of being 80% light oil weighted by the end of this year.”
About Nextraction Energy Corp.
Nextraction Energy Corp. is a Canadian junior oil and gas company engaged in the exploration and development of oil and gas resources in North America. The Company–s model is the “next round of extraction on known plays.” Nextraction targets projects along trends with known reserves that provide low risk, high return development opportunities in both conventional and unconventional resource projects. In addition to the Provost pool, the Company is producing light oil and liquids rich gas at its Pinedale Anticline property in Wyoming.
READER ADVISORY
Certain statements made and information contained herein may constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities legislation. These statements relate to future events or the Company–s future performance. Often, but not always, forward-looking statements or information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes” or variations of such words and phrases or words and phrases that state or indicate that certain actions, events or results “may”, “may have”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Although management believes that the assumptions made and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward-looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These statements speak only as of the date of this Press Release and are expressly qualified, in their entirety, by this cautionary statement.
In particular, this Press Release contains forward-looking statements, pertaining to the anticipated benefits resulting from the Company–s Provost project; oil and gas resource estimates, future production and future net revenue; the Company–s future capital and other expenditures and requirements; results of exploration and development activities and dates by which certain areas may be developed or may come on-line; the Company–s future financing and capital activities, contingent liabilities and environmental matters; and expectations regarding the Company–s ability to obtain additional financing on satisfactory terms.
The Company–s actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors set forth below herein pertaining to general economic conditions; volatility in the market prices for oil and gas; stock market volatility; uncertainties associated with estimating resources; geological, technical, drilling and processing problems; ability to explore, develop, produce and transport crude oil and natural gas to markets; title to oil and gas leases; dependence upon farm-out and joint venture partners; liabilities and risks, including environmental liabilities and risks, inherent in the oil and gas industry; fluctuations in currency and interest rates; economic conditions in the countries and regions in which the Company carries on business; competition for, among other things, capital, acquisition of reserves, equipment, undeveloped lands and skilled personnel; lack of availability of additional financing and unpredictable weather condition.
Should one or more of these risks and uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements and information.
Although the Company has attempted to identify factors that may cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actual results, performances, achievements or events to not be as anticipated, estimated or intended. Also, many of the factors are beyond our control. As actual results and future events could differ materially from those anticipated in such statements and information, readers should not place undue reliance on forward-looking statements or information. Except as may be required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulations Services Provider have reviewed this release and do not accept responsibility for the adequacy or accuracy of this release.
Contacts:
Nextraction Energy Corp.
Mark S. Dolar
President and Chief Executive Officer
604-630-0300 or Toll Free: 1-888-630-0370