WESTMINSTER, Colo., June 1, 2011 (GLOBE NEWSWIRE) -- Arête Industries, Inc. (OTCQB:ARET) announced today that the recently acquired properties include current production of approximately 175 Barrel Oil Equivalents per Day (BOEPD) or 63,875 BOE on an annualized basis.
Moving Forward
In addition to the current production and cash flow, the properties offer a large opportunity for future development and we are in the process of evaluating its potential. We have a short-term (two year) drilling plan that will begin July 1, 2011 and continue through December 31, 2012.
The Company intends to drill, refract, and recomplete approximately 12 additional wells during 2011 with a cost of $1.9 million with expected daily production of 550 BOE or annualized production of 200,750 BOE exiting 2011.
Expected 2011 Drilling Plans:
- Drill five wells in the Big Bow Field;
- Drill two wells in Smokey Creek;
- Refrac three wells in the Walsh Field, and
- Recomplete two wells in School Creek.
Expected 2012 Drilling Plans
The Company expects to refrac and recomplete eight School Creek wells and drill three School Creek wells on a joint venture basis for an estimated cost of $5.15 million. With the additional expected production, we expect 1,665 BOE daily production or an annualized production of 387,630 BOE exiting 2012.
Future
As part of the purchase, we have approximately thirty-four thousand gross acres that include approximately twenty-one thousand net acres under lease and approximately 250 Proven Undeveloped (PUD) locations. Approximately 200 of the PUDs are in the Coal Bed Methane (CBM) field where we own a pipeline. Our pipeline currently services 16 of our existing wells and is operating at only eight percent usage. If the Company is able to develop these 200 PUDs, we expect to increase the usage of the pipeline to over 70 percent. In addition, there has been several horizontal gas wells drilled in the area that we are exploring to provide transportation through our pipeline.
Donald Prosser, CEO of Arête Industries, said, "We are excited to begin executing on our drilling program to increase revenues and shareholder value. To maximize this opportunity, we have a lot of information to evaluate and decisions to be made. We expect to have a medium term plan by mid-summer and we our also exploring horizontal oil and gas joint ventures."
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About the Company
The Company is the operator of a gas gathering system and holds oil and gas properties in the Rocky Mountain Region of the United States. For additional information on the Company visit our website at http://www.areteindustries.com/
Statement as to Forward Looking Statements.
Certain statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties not known or disclosed herein that could cause actual results to differ materially from those expressed herein. These statements may include projections and other "forward-looking statements" within the meaning of the federal securities laws. Any such projections or statements reflect Arête's current views about future events and financial performance. No assurances can be given that such events or performance will occur as projected and actual results may differ materially from those projected. Important factors that could cause the actual results to differ materially from those projected include, without limitation, whether the Company will be able to pay its $9.5 million promissory note due July 1, 2011, the Company's dependence on its management, the Company's lack of capital, changes in prices for crude oil and natural gas, the ability of management to execute plans to meet the Company's goals and other risks inherent in the Company's businesses that are detailed in the Company's Securities and Exchange Commission ("SEC") filings. Readers are encouraged to review these risks in our SEC filings.