Brownstone Energy Successfully Drills Initial Kokopelli Well To 8,440 Feet

abarrelfull wrote on 26 Sep 2012 05:44
Tags: brownstone n-america upstream usa

Latest News

• Want a weekly review of refining news?

• This Week in Refining
• RSS Feed

Brownstone Energy Inc. (TSXV: BWN; OTCQX: BWSOF) (“Brownstone” or “the Company”) is pleased to announce that the operator has advised that the first well at its 28% owned Kokopelli project in the Piceance Basin, Colorado, was directionally drilled to a total depth of 8,440 feet, just below the base of the Rollins Formation, and has encountered reservoir quality and gas column thickness similar to other recently drilled wells in the immediate area.

The 2,500 feet of gross gas column, depth and composition of reservoirs encountered in the Lower Mesa Verde Formation were as expected. The well has been cased to total depth in preparation for completion operations. Completion operations, including perforating, fracturing and production tie-in are expected to be completed during Q4 2012. Successful completion of this well secures for Brownstone the substantial portion of the proven, probable undeveloped reserves attributed to the Lower Mesa Verde section of this Kokopelli leasehold by Brownstone’s independent engineers.

As previously reported, this 2,200 acre project is ideally situated for exploitation of both the Williams Fork and Mancos hydrocarbon laden sand/shale bodies immediately adjacent to Williams Energy (NYSE: WPX) and Bill Barrett Corporation (NYSE: BBG) who are developing and producing their respective leaseholds to the east, west and north of the Company’s acreage. Brownstone has worked closely, through its operator, Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), with important constituents including local citizenry, government, the Bureau of Land Management and the Colorado Division of Wildlife to develop a mutually acceptable development plan for this environmentally sensitive area.

According to National Instrument 51-101 standard in Canada, the reserves evaluation report for Brownstone's leases at Kokopelli Field effective June 30, 2011, performed by Gustavson and Associates of Boulder, Colorado, projects the before tax discounted net present value 10% (NPV10) of proved undeveloped (PUD) reserves valued at $34.6 million and proven plus probable undeveloped (2P) reserves valued at $74.5 million net to Brownstone in the Lower Mesa Verde Formation. Associated Proven and Probable Undeveloped Reserves net to Brownstone from the same independent engineering report are 60 BCFe which includes 3.6 MM barrels of liquids. It should be noted that the estimated values disclosed do not represent fair market value.

• Brownstone Energy Successfully Drills Initial Kokopelli Well To 8,440 Feet

---