CALGARY, June 11 /PRNewswire-FirstCall/ --
Corporate Production Update ---------------------------
"Our primary activity is in Oklahoma where we use Bubble Point Technology to extract residual oil, gas and natural gas liquids from the Hunton Resource Play. In addition to the Hunton being a very large opportunity for Petroflow, the use of Bubble Point Technology has resulted in the steady increase of our production rates and we are most pleased to report this to our shareholders", stated Mr. Sandy Andrew, President and COO of the Company.
The estimated peak production rate for the month of April 2009 was 4,046 BOEs (24,276 MCFGE) per day. April 2009 averaged approximately 3,727 BOEs (22,362 MCFGE) per day of production. Our average production for the month of April has grown by approximately 2% over March, even though no additional wells were put on stream in April. Approximately 31% of the production was oil and natural gas liquids and 69% was natural gas.
"The Hunton represents a low risk enterprise for Petroflow since we use Bubble Point Technology to recover a resource that is already identified. With the excellent production performance we are experiencing and the decrease we have been able to achieve in capital costs, this play still provides tremendous upside opportunity for Petroflow, even with current forecasted commodity prices."
The Hunton Resource Play in Oklahoma has an areal extent of approximately 16 million acres. Assuming 10% of the land is prospective, the resource potential could be as high as 6.2 Tcfe.(1)
Starting in February 2009, Petroflow began to report natural gas liquids ("NGL") volumes from its Oklahoma operations in accordance with the new forms of midstream processing contracts. This change has resulted in an approximate initial increase of five percent in Petroflow's barrel of oil equivalent volumes. In the second quarter of 2009, as a contract revision takes effect, an additional increase of approximately three percent will occur. The midstream contracts which prompted the reporting change provide direct compensation for NGL volumes. The new prices have been staging into effect since the agreements were finalized in May 2008 and will continue to phase in during the first half of 2009. The full reserves value of these positive changes is reflected in Petroflow's year end 2008 reports.
Other Production Areas ----------------------
Our Texas and Alberta properties continue to produce and provide consistent cash flow for operations.
(1) "The Hunton formation has been geologically proven to underlie approximately 1/3 of the State of Oklahoma at varying depths and in varying thicknesses and percentages of permeability and porosity. While not definitive, our geological investigations to date have allowed us to conclude that 10% or more of the formation could exhibit the combination of characteristics necessary to allow for commercial exploitation. Based on our historical success, the calculations generate up to 6.2 Tcfe of potentially recoverable hydrocarbons. At present, Petroflow has access to mineral rights representing only 75.2 Bcfe on a proved undeveloped plus probable basis. Although some of the rest of this hydrocarbon potential is under lease by other oil and gas companies, our work to date has proven that much of these potential lands would be available for lease". Forward Looking Statements
This news release contains statements about oil and gas production and operating activities that may constitute "forward-looking statements" or "forward-looking information" within the meaning of applicable securities legislation as they involve the implied assessment that the resources described can be profitably produced in the future, based on certain estimates and assumptions.
Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those anticipated by Petroflow and described in the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, adverse general economic conditions, operating hazards, drilling risks, inherent uncertainties in interpreting and applying engineering data, geologic data, and accumulated operating and production knowledge, technology change and failure, competition, reduced availability of drilling and other well services, fluctuations in oil and gas prices and prices for drilling and other well services, government regulation and foreign political risks, fluctuations in the exchange rate between Canadian and US dollars and other currencies, as well as other risks commonly associated with the exploration and development of oil and gas properties.
Additional information on these and other factors, which could affect Petroflow's operations or financial results, are included in Petroflow's reports on file with Canadian and United States securities regulatory authorities. We assume no obligation to update forward-looking statements should circumstances or management's estimates or opinions change unless otherwise required under securities law.
BOEs derived by converting gas to oil in the ratio of six thousand cubic feet of gas to one barrel of oil (6 Mcf: 1 bbl). BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
The TSX has not reviewed and does not accept responsibility for the
adequacy or accuracy of this news release.
Petroflow Energy Ltd.
CONTACT: Mr. John Melton, CEO, Petroflow Energy Ltd., (985) 796-8080,
http://www.petroflowenergy.com/; Mr. Duncan Moodie, CFO, Petroflow Energy Ltd., (403)
539-4320, http://www.petroflowenergy.com/
