Bnk Petroleum Inc. Lebork S-1 and Indiana Update

abarrelfullabarrelfull wrote on 01 Nov 2011 08:28
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BNK Petroleum Inc. (the “Company”) (TSX: BKX), on behalf of Saponis Investments Sp. z o.o, announced today that fracture stimulations were performed on both the Cambrian and Ordovician intervals in the Lebork S-1 well which did not enable an effective test of the two shales. This is due to only a small percentage of the programmed quantities and concentrations of proppant being placed in each shale. Although gas was flared from each interval and 43% and 50% of the stimulation fluid was eventually recovered from the Alum (Cambrian) and Ordovician shales respectively, the small amount of proppant placed in each zone was not enough to provide effective conductivity, allow conclusive production tests, nor provide the assessment of meaningful reservoir parameters. As predicted, the reservoir was over pressured but it took even higher pressures to stimulate the shales than anticipated.

It appears that both the Ordovician and Alum shales have complex fracture matrices, which were predominantly responsible for the reduced amount of proppant placed. It is expected that this complex matrix could prove to be a positive characteristic to this shale play as it would provide a larger contact area, thereby increasing potential recoveries and overall production.

A comprehensive review of the stimulation attempts have been undertaken with leading industry experts.

In order to properly test the shales in the Lebork S-1 well, an optimized fracture stimulation program has been designed across the same intervals, requiring the use of a high pressure stimulation string. A suitable stimulation string cannot be delivered to the location before the cold winter weather sets in, so the restimulation and testing of the well have been rescheduled until spring 2012. Cold weather creates additional challenges in the stimulation process possibly affecting the outcome of the stimulation.

Therefore, due to similar cold weather concerns, the Saponis group has decided to reschedule the Wytowno S-1 and Starogard S-1 fracture stimulations to the spring of 2012 as well.

Although an effective test of each zone was not achieved at this time, we are encouraged by the flared gas volumes and that it comprised methane, ethane and propane. The Company is looking forward to effectively testing of all three wells next year.

The Company, through a wholly owned subsidiary, has contracted with MND Drilling & Services a.s. to begin drilling three wells on the Company’s three wholly owned Indiana Sp. z o.o. blocks starting in February 2012. The three Indiana blocks, Darlowo, Trzebielino and Bytow are situated immediately south of Saponis’ Slawno and Slupsk concessions. The Saponis group has agreed to utilize the same drilling rig to drill up to 3 wells on the Saponis concessions in which the Company owns approximately 26.7 percent.

The acquisition of the previously announced 2D seismic program, which consists of about 407 km on the Saponis concessions and 333 km on the Indiana concessions started on October 8th, 2011. The objective of the seismic program is to further define basin structure and burial history as well as to aid in the selection of individual well locations.

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