Blackbird Energy Announces Second Montney Horizontal Well Operational Update, Tie In of the 1st Two Wells and Preparing to Drill 3rd Well At Bigstone

Blackbird Energy Announces Second Montney Horizontal Well Operational Update, Tie In of the 1st Two Wells and Preparing to Drill 3rd Well At Bigstone

January 27, 2012

Vancouver, B.C., Jan 27, 2012 -- Garth Braun, CEO of Blackbird Energy Inc. (TSX.V-BBI) is pleased to provide an operations update on its Bigstone Montney high natural gas liquids resource play. The Donnybrook Energy Bigstone Hz 15-32-60-22 W5M well (25% working interest to Blackbird) encountered 2744 m of high quality Montney reservoir with strong gas shows and excellent penetration rates. The reservoir encountered is comparable to the Montney interval that was successfully completed in Blackbird's first Bigstone Montney well, Donnybrook et al 14-29-60-22w5, which was the 1200m Hz Bigstone Montney discovery well that tested 4.3mmcf/d and 295 barrels of NGL's (1,011 barrels of oil equivalent per day). The reservoir quality encountered while drilling the 15-32 well proves the play and reservoir quality of the Montney at Bigstone extends at least as far north as the northern boundary of Blackbird's 1792 ha 7 section (448 ha 1.75section net) contiguous land interests.

The 15-32 well is currently flowing natural gas, natural gas liquids and hydraulic fracture fluids undergoing clean up operations after completion of the 23 stage hydraulic fracture operation. During the hydraulic fracture operation 460 tons of fracture propant and fluids were placed. However, mechanical complications were encountered that have limited the number of stages that the operator can definitively say were successful. The final 5 stages were clearly successfully completed with 120 tons of propant and fracture fluids placed. At this time the operator is preparing to put production tubing in place and continue to flow the well. The flow rates for the 15-32 well will be released once the well has had further time to clean up and the rates are stabilized.

An industry competitor has drilled a 2760m extended reach Hz well offsetting Blackbird's lands 800 m to the west and parallel to Blackbird's 14-29 well. This well terminated 200m south of Blackbird's Section 31 and 200m west of the NW corner of section 29. The operator of the well reported a final 24 hour test rate after a 4 day flow period of 12.5mmcf/d with 770 barrels of condensate per day and expects to yield a further 30-35 bbls per mmcf of natural gas liquids that will be recovered from a shallow cut processing facility. This well is a strong indication of the productivity of the Montney reservoir at Bigstone and indicates the reservoir continues to the west and northwest onto Blackbird interest lands.

Donnybrook has informed Blackbird that surveys have been completed and contracts are in place to construct a 1.5 mile pipeline to tie in the 14-29 and 15-32 wells. Both wells were drilled from the same surface location and will be tied into the pipeline and shared surface facilities. Field construction operations for the pipeline are expected to commence in mid-February with all facilities ready for production to start by April 1st.

Donnybrook is currently waiting on surface approval to commence construction of 2 drilling pads that will facilitate the drilling of up to 6 more wells. Surveys have been completed for 5 of these development locations. Construction of the first surface lease is expected to be complete by mid-February and Donnybrook has informed Blackbird they have located a rig suitable to commence drilling the next well as soon as the third week in February. Donnybrook anticipates this well will be drilled from a surface location at 4-28-60-22w5.

Garth Braun CEO of Blackbird Energy Inc. stated, "The mechanical issues we have encountered with the 15-32 well have raised some technical issues. However, Blackbird is very confident about the quality of the reservoir the 15-32 well has encountered and looks forward to receiving results from the production test and placing the well on production. We are continuing to move ahead in the field with operations to tie in both the 15-32 and 14-29 wells, and are preparing to drill a third well on this exciting prospect."

About Blackbird

Blackbird's Bigstone Project is comprised of lands and licences covering a total of 4,480 acres, in Township 60, ranges 22 and 23W5 at Bigstone, Alberta. By completing the terms of the farm in agreement, Blackbird has earned 25% of Donnybrook Energy Inc.'s interest in the Bigstone lands and in any future operations within an area of mutual interest.

Blackbird's wholly-owned subsidiary Blackbird Energy LLC ("Blackbird Energy") holds a 75% interest in 3,857 acres of leasehold land located in Gray County, Texas known locally as the "Mathers-Gordon Prospect". The Mathers-Gordon Prospect is a multi pay oil and gas prospect. Blackbird Energy is the operator of the prospect. In addition, Blackbird plans to actively look for further oil and gas properties for acquisition or potential joint ventures.

On behalf of the board of

Per: "Garth Braun"
Garth Braun
Chief Executive Officer and Director

For further information contact:

Doren Quinton, President
QIS Capital Corp.
Ph: (250) 377-1182

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding Donnybrook's ability to drill and complete the next wells on the project, the timing of such drilling, the timing and completion of any subsequent tie ins or production, and any results from the wells specifically or the Montney Shale play in general. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties and speculative nature associated with oil and gas exploration and production, (3) a decreased demand for natural gas, (4) any number of events or causes which may delay or cease exploration and development of the Company's property interests, such as environmental liabilities, weather, mechanical failures, safety concerns and labour problems; (5) the risk that the Company does not execute its business plan, (6) inability to retain key employees, (7) inability to finance operations and growth, and (8) other factors beyond the Company's control. These forward-looking statements are made as of the date of this news release and, except as required by law, the Company assumes no obligation to update these forward-looking statements, or to update the reasons why actual results differed from those projected in the forward-looking statements.

Oil Equivalency Conversion (BOE)

Where amounts are expressed on a barrel of oil equivalent ("BOE") basis, natural gas volumes have been converted to BOE at a ratio of 6,000 cubic feet of natural gas to one barrel of oil equivalent (6 Mcf = 1 BOE). The conversion ratio is based upon an energy equivalent conversion method, primarily applicable at the burner tip and does not represent value equivalence at the wellhead. BOE values may be misleading, particularly if used in isolation.


Back to the News page