CUT BANK, MT, Dec. 4, 2012 /PRNewswire/ - Mountainview Energy Ltd. (TSXV: MVW) ("Mountainview" or the "Company") is pleased to provide an operational update.
Operational Update - 12 Gage Project
Wigness 5-8-1H, Section 5 & 8 T162N-101W, Divide County, North Dakota
On November 14, 2012 Mountainview spudded the Wigness 5-8-1H well (the "Wigness Well"), the first Bakken/Three Forks well of Mountainview's planned three well winter drilling program on its 12 Gage Project. The 7" intermediate casing for the Wigness Well was successfully set to a landing point of 8,530 feet and the well subsequently reached total depth of 18,280 feet. The Company successfully ran the 4 ½" liner to the total depth and is preparing the Wigness Well for a 26 stage fracture stimulation. Total operational days from spudding the well to setting the 4 ½" liner was 19 days. Mountainview plans to complete the Wigness Well by the end of December, 2012.
Through its wholly-owned subsidiary Mountain Divide, LLC ("Mountain Divide "), the Company holds a 93.75% working interest in the Wigness Well, 25% of which is subject to reversion to another working interest owner following payout of 100% of the cost of their proportionate working interest costs in the well plus a 200% penalty. Pursuant to Mountain Divide's previously announced credit facility (the "Facility"), all of Mountain Divide's oil and gas properties located in Divide County, North Dakota (including the lands in the 12 Gage Project) are subject to a 39% after pay-out net profits interest (the "NPI") held by Mountain Divide's lender under the Facility (the "Lender"). The NPI is defined as all revenues received by Mountain Divide, less all operating costs, production taxes, and capital costs incurred by Mountain Divide.
Payments on the NPI shall commence upon repayment in full of the outstanding Facility. Pursuant to the agreements underlying the Facility, the NPI will automatically reduce to 20% once the Lender achieves a 1.65 x return on investment.
Leininger 3-10-1H, Section 3 & 10 T162N-R101W, Divide County, North Dakota
Mountainview is currently rigging the Nabors 460 rig down and is preparing to move the rig to the Leininger 3-10-1H well (the "Leininger Well") location. The Leininger Well is the second Bakken/Three Forks well planned for the three well winter drilling program on Mountainview's 12 Gage Project. This well has been permitted and the location is built.
The Leininger Well is located approximately 2 miles east of the Wigness Well and Mountainview expects to spud the Leininger Well on or about December 9, 2012. Through Mountain Divide, the Company holds a 88.28% working interest in the Leininger Well, 3 to 4% of which is subject to reversion to another working interest owner following payout of 100% of the cost of their proportionate working interest costs in the well plus a 200% penalty. The Leininger Well is also subject to the NPI.
Olson 35-26-1H, Section 35 & 26 T163N-R101W, Divide County, North Dakota
The Company has received approval from the North Dakota Industrial Commission to drill the Olson 35-26-1H well (the "Olson Well"), which will be the final well planned for the three well winter drilling program on Mountainview's 12 Gage Project. The Olson Well is located approximately 2-3 miles north-east of the Leininger Well. Through Mountain Divide, the Company holds a 52.23% working interest in the Olson Well, which is also subject to the NPI.
12 Gage Regional Activity Update
As previously stated there are currently at least five operators developing the Middle Bakken and Three Forks formations near the 12 Gage Project: American Eagle Energy Corporation, SM Energy Company, Samson Resources, Crescent Point Energy Corp. and Baytex Energy Corp. All of the following operators are continuing their development of the Bakken/Three Forks play near the 12 Gage Project. Along with these operators, Divide County, North Dakota has also seen recent M&A activity with Continental Resources and Magnum Hunter Resources each making acquisitions in the area. The following table illustrates the recent drilling activity that has been made public by the relevant company or regulatory authorities:
Mountainview Energy Ltd. is a public oil and gas company listed on the TSX Venture Exchange, with a primary focus on the exploration, production and development of the Bakken and Three Forks Shale in the Williston Basin and the South Alberta Bakken.
SOURCE Mountainview Energy Ltd.
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