|Vancouver, B.C., Nov. 30, 2011 -- Blackbird Energy Inc. (TSX.V-BBI) announces, further to its November 18, 2011 press release, that it has been informed by the operator, Donnybrook Energy Inc, that the DEI Bigstone Hz 15-32-60-22 W5M well (25% working interest to Blackbird) drilling operations commenced on November 25, 2011. The drilling program calls for the well to be drilled to a total measured depth of approximately 5,150 meters from surface location 3-29-60-22W5, cased and prepared for completion and fracing operations (or abandoned) within a 35 day time frame. The DEI Bigstone Hz 15-32 well has a planned 2,500 metre +/- horizontal section. Blackbird has funded its obligations for the drilling of this well.|
In regards to the advanced drilling techniques being applied, Garth Braun, CEO stated, "long reach horizontal wells used in the exploitation of the Montney resource in West Central Alberta Deep Basin fields such as Resthaven, Simonette, Lator, Fir and others have been reported to yield gas flow test rates at multiples of 3 to 4 times or more than that of the more common 800 to 1200 meter laterals. We recognize that the use of long laterals require a company to assemble or otherwise control the P&NG rights to a contiguous land area in order to insure compliance with ERCB drill spacing directives and correlative rights (ownership) issues with neighbouring P&NG lease holders. We are of the view that the drilling, completion and fracture stimulation technology used in the drilling and completion of long reach wells is leading edge, state of the art technology. Small cap companies like ours rarely have the opportunity to be involved in large, high profile plays such as the Bigstone - Montney horizontal project."
The Company's discovery well, Bigstone Hz 14-29 discovery well (37.5% BPO/25% APO working interest), tested in the last 24 hours of a 4 day production test at a rate of approximately 4.3 million cubic feet per day (mmcf/day) of natural gas and 295 barrels per day (bbls/day) of condensate from a 1,254 metre horizontal section; 1,011 barrels of oil equivalent per day (boe/day).
A third Donnybrook operated Bigstone Montney horizontal well (25% working interest to Blackbird) is also planned to be spud in Q1 2012. There are several potential locations for the third well and discussions are ongoing with partners to determine which location will be selected. Blackbird is joint ventured on 7 sections at Bigstone, which would support an equivalent of 14-28 horizontal wells depending upon the lateral length of each horizontal leg.
Blackbird had announced, subject to approval from the TSX Venture Exchange (the "TSX-V"), a brokered private placement, for gross proceeds of up to $6,000,000 (the "Private Placement"). As recently announced, a first tranche of the Private Placement has closed for gross proceeds of approximately $1.1 million. The Private Placement will be reduced to gross proceeds of up to $3.5 million.
The reduction in the amount being raised under the Private Placement is as a result of the timing of the drilling of the next two Montney wells at Bigstone. Given the period between the drilling of the drilling of DEI Bigstone Hz 15-32-60-22 W5M and the drilling of the third well, Blackbird will not require the entire amount originally sought, and instead will have the ability to enter into a subsequent financing, ideally on terms more favourable to the Company.
Garth Braun CEO of Blackbird Energy Inc. stated, "the Bigstone discovery well clearly exceeded our expectations and the development plans for the area are being accelerated. The recent announcement of the drilling of two +/- 2400 horizontal wells to the south of our lands further highlights the focus that the Bigstone project is gathering. We are looking forward to developing this exciting project with our partners. Once these Bigstone wells are on stream Blackbird will have production that will allow us to fund future development wells. In addition, the fortunate timing for the upcoming drilling activity has given us the opportunity to minimize dilution at current prices by financing the next well only, and then having the time to finance the subsequent well on better terms. We are confident that our continued success in developing this exciting project with our partners will give us this ability."
Finally, discussions are underway with area industry partners to construct a gathering system during Q1 2012. It is anticipated that all production from Blackbird's Bigstone project area will be on-stream during the second quarter of 2012. Blackbird expects to be able to fund the drilling of the second well and the planned tie in from funds to be received from the recent closing of the first tranche of the Private Placement offering and the proceeds from the second tranche, that is expected to close on December 7th.
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
BLACKBIRD ENERGY INC.
Per: "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 two 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.
THE TSX VENTURE EXCHANGE INC. HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE. 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.