DENVER, March 16, 2011 /PRNewswire/ -- EARTHSTONE ENERGY, INC. (Nasdaq: ESTE) supplied an update of its recent North Dakota activity. During the past year the Company has participated in eight new horizontal wells in three distinct areas of North Dakota; the Banks Field, the Mondak Field and Indian Hill Field.
Banks Field, McKenzie County
In the Banks area, the Company participated in four wells; all of which were operated by Zenergy, Inc; a private company headquartered in Tulsa, Oklahoma. The Pederson #10-3H was drilled in April 2010 and is now both producing and no longer on confidential status. The well had an initial potential of 522 barrels of oil per day and has cumulative production of approximately 65,000 barrels of oil, 109,000 MCF of gas and 35,000 barrels of water. In February 2011, the well was re-entered to clean debris out the horizontal lateral of the well. Following this work, the well is producing approximately 350 barrels of oil per day. Earthstone has a 2.4 % working interest in this well.
The Ceynar 29-32H was drilled in November 2010. Efforts to complete and hydraulically stimulate the well were hampered by harsh winter conditions. As a result, the well has just recently been placed on production. The well is still on confidential status and an initial production rate has not been released by the Operator. However, the Company estimates that the well will have an initial potential of approximately 1,000 barrels of oil per day. Earthstone has a 0.132 % working interest in this well.
The A. Johnson 12-1H and the Berquist 33-28H are currently being drilled. Earthstone has a 0.084 % and 0.18% working interest in these wells, respectively. Both wells are expected to be on production by late May.
The Company previously reported that Brigham Exploration Company, Austin, TX, had purchased Panther Energy Company, LLC's, Tulsa, OK, interest in the Banks area. Brigham had previously indicated that they planned to drill two or more wells prior to the end of 2010. While that did not occur, Earthstone has recently received drilling proposals for two wells; the Garmin 19-18 #1H and the Enerud 9-4 #2H. Drilling is expected to begin on both wells by early summer. Earthstone expects to have less than 1% working interest in both wells.
Mondak Field, McKenzie County
In the Mondak Field, the Company participated in three wells; all of which were operated by XTO Energy, a subsidiary of ExxonMobil. The Mondak Federal 11X-14 was drilled and completed during our last fiscal year, but was not placed on production until April 2010. The well is no longer on confidential status. The well had an initial potential of 489 barrels of oil per day and has cumulative production of approximately 34,000 barrels of oil, 20,400 MCF of gas and 20,000 barrels of water. Earthstone has an 8.4 % working interest in this well.
The Mondak Federal 14X-11 was drilled, completed and placed on production during our last fiscal year. However, as previously reported, the Company did not learn it had an interest in the well until November 2010. As such, the capital expenditures for this well will be recognized in this fiscal year. The well had an initial potential of 1,175 barrels of oil per day and has cumulative production of approximately 57,000 barrels of oil, 36,000 MCF of gas and 38,000 barrels of water. Earthstone has a 2.2 % working interest in this well.
The Mondak Federal 24X-12 was drilled in October and November 2010. Efforts to complete and hydraulically stimulate the well were hampered by harsh winter conditions. As a result, the well has just recently been placed on production. The well is still on confidential status and an initial production rate has not been released by the Operator. However, the Company estimates that the well will have an initial potential of approximately 850 barrels of oil per day. Earthstone has a 2.8 % working interest in this well.
Indian Hill Field, McKenzie County
In the Indian Hill Field, Earthstone is participating in two wells; both of which are operated by SM Energy Company, Denver, CO. The Fossum 15-35H was drilled and completed between September and November 2010. The well is no longer on confidential status. The well had an initial potential of 674 barrels of oil per day and has cumulative production of approximately 30,000 barrels of oil, 17,000 MCF of gas and 24,000 barrels of water. Earthstone has a 0.27 % working interest in this well.
Earthstone has recently received a drilling proposal from SM Energy for one well; the Wold 15-33H. Drilling is expected to begin this month. Earthstone expects to have a 2.3% working interest in the well.
"With our fiscal year end rapidly approaching, we are pleased to provide this operational update," commented Ray Singleton, President of Earthstone. "The Company continues to pursue its strategy of drilling non-operated horizontal Bakken wells along with the acquisition of producing properties in the Montana and North Dakota portions of the Williston basin. In addition, Earthstone is evaluating two non-Bakken opportunities which could positively impact the Company's reserves and production."
Singleton further stated, "Regarding our future plans, the next few months should be exciting. With a number of efforts both underway and in the planning process, we anticipate in the coming year both exceeding last year's capital expenditures and increasing the Company's production and profitability."
ABOUT EARTHSTONE ENERGY:
Earthstone Energy, Inc. is an independent oil and gas exploration and production company with primary operations in the Williston Basin, the Denver-Julesburg Basin in Colorado, southern Texas and the Gulf Coast area. Earthstone is currently traded on NASDAQ Capital Markets under the symbol ESTE. Information on Earthstone can be found at its web site: www.earthstoneenergy.com
THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. Some statements contained in this release are forward-looking, and therefore involve uncertainties or risks that could cause actual results to differ materially. Forward-looking statements can be identified by words such as "should," "may," "will," "anticipate," "expect," "estimate," "intend" or "continue," or comparable words or phrases. In addition, all statements other than statements of historical facts that address activities that Earthstone intends, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements also include comments regarding the future importance of newly proposed, drilled or recompleted wells. Factors that could cause actual results to differ materially include availability of rigs and services, price volatility of oil and gas, estimated production rates and adjustments to ownership percentages in addition to economic and political events affecting supply and demand for oil and gas, loss of customers for oil and gas production and government regulations. These and other factors are discussed in more detail in Earthstone's filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K filed for March 31, 2010. The Company disclaims any obligation to update forward-looking statements.
SOURCE Earthstone Energy, Inc.