HOUSTON, December 1, 2011 /PRNewswire/ --
Fram Exploration ASA today provided an update on its drilling program in the South Greene field, Renville County, North Dakota, which is close to the Canadian border. The field, first discovered in February 2011 by the Funke #1 well, has been undergoing technical evaluation but has now entered the development phase.
"We are greatly encouraged by early production results from our discovery because it validates our proprietary geological model for the other 18 prospects and leads that we hold in Renville County," commented Patrick Keenan, group president and CEO. "The successful development of our South Greene field confirms the wisdom of Fram's strategy to pursue overlooked and/or under-exploited plays in known hydrocarbon basins."
The Funke #1 was drilled to a vertical depth of approximately 5,600 feet to test the Mission Canyon formation and encountered 32 net feet of oil-bearing pay zones. The State of North Dakota renamed the field late in 2011. The discovery well initially produced in excess of 100 barrels of oil per day (bopd) and continues to produce at more than 70 bopd under restricted flow conditions. The Company has recently drilled two development wells on the structure and will complete drilling a third well before year end. The wells are in various stages of log interpretation, core analysis and completion operations but each appears to be higher on the structure than the discovery well, which suggests thicker pay horizons and better well performance.
Management believes that the South Greene field will be producing in excess of 500 barrels of oil per day by February 2012 with each well having an initial production averaging 150 barrels per day. To develop the entire structure, the field is expected to require about 15 wells, each of which should average 225,000 barrels of ultimately recoverable oil. The economic indicators for the field include after-tax returns estimated to be greater than 700% and net present values discounted at 10% in excess of $100 million, assuming a $90 West Texas Intermediate (WTI) oil price and a completed well cost of $1.25 million.
"With these economic expectations, the South Greene field development constitutes a very significant breakthrough event in the short life of Fram Exploration," continued Keenan.
The producing zones of the Mission Canyon include the Bluell, Sherwood, and Mohall members all of which produce in areas throughout Renville County. The reserve potential for the field is in the range of 4 to 6 million recoverable barrels. The Smith field, located only three kilometers away, has one well that has produced almost 600,000 barrels while the field has produced approximately 3.6 million barrels to date. The oil from South Greene is currently being trucked to a pipeline point and is receiving a price discount of approximately $22 per barrel less than WTI. Fram owns and operates a 100% working interest and an 80% net revenue interest in the South Greene field.
Fram has 18 prospects and leads based on similar structures to South Greene identified on its approximately 10,500 acres of leasehold in the Williston basin and plans to test these over the next few years. The Company plans to develop subsequent discoveries by drilling a series of high-angle, extended-reach wells to maximize the exposure to the reservoir and provide higher production rates. At this time, Fram has no plans to test the underlying Bakken shale formation in its lease portfolio but is considering joint ventures to farm out its deeper rights below the Mission Canyon.
Fram Exploration ASA
About Fram Exploration:
Fram Exploration is an international E&P company with oil & gas assets onshore in the states of Colorado and North Dakota in the United States and in the Republic of Trinidad and Tobago. The Company has significant worldwide industry experience in the technical disciplines of geology, geophysics, reservoir modeling, petroleum engineering, operations management, drilling, and completion expertise. The Company targets undervalued assets in regions with politically stable regimes and attractive fiscal terms. Fram is a private Norwegian company not currently listed on any stock exchanges. For more details about Fram, see http://www.framexploration.com
The information included in this press release contains certain forward-looking statements that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future. These statements are based on various assumptions made by the Company, which are beyond its control and are subject to certain risks and uncertainties. As a result of these and other risk factors, actual events and our actual results may differ materially from those indicated in or implied by such forward-looking statements. The reservation is also made that inaccuracies or mistakes may occur in the information given above about current status of the Company or its business.
This announcement is not an offer for sale of securities in the United States. The securities issued by the Company have not been registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), and may not be sold in the United States absent registration or pursuant to an exemption from registration under the U.S. Securities Act. Fram Exploration ASA does not intend to register any portion of its securities in the United States or to conduct a public offering of securities in the United States.
SOURCE Fram Exploration