Hyperion Exploration Corp. Announces Operations Update
CALGARY, ALBERTA--(Marketwire - Oct. 25, 2012) - Hyperion Exploration Corp. ("Hyperion" or the "Company") (TSX VENTURE:HYX) is pleased to announce positive test results from its latest step-out Cardium horizontal light oil well, significantly increasing confidence in its extensive resource base at Niton/McLeod.
Niton / McLeod Operations Update
The Company's second Cardium horizontal well ("02-02") in the Niton/McLeod area has been successfully drilled and stimulated using a 20 stage, water based frac. During the 36 hour flow test, the well continued to recover load fluid (water) from the fracturing operations and new reservoir oil. During the last six hours of the test, the well achieved a daily equivalent light oil rate of 400 bbl/day with 249 mcf/day of solution gas (approximately 441 boe/day, 90% light oil). Hyperion has now shut-in the 02-02 well to finalize equipping and tie-in operations with full production expected to start in early November. Based on the encouraging results from the 02-02 well, Hyperion intends to spud the next well at McLeod by mid-November.
Hyperion is highly encouraged by the early stage performance that the 02-02 well has exhibited. These positive results provide increased confidence in the projected risked well type curve of 161 boe/d (based on an average 30 day production rate and 92% oil), recoverable reserves of 146 mboe per well (88% light oil) and a net present value (10% before tax) of approximately $2 million per well for the tier 1 wells within the Company's 172 net locations in the area.
The 02-02 well was drilled approximately 20 kilometers (12 miles) from Hyperion's first Cardium horizontal light oil well in the Niton/McLeod area ("05-14"). Continued strong production performance of the 02-02 well, once tied in, will significantly de-risk the type curve profile for the area and will further demonstrate the economic potential of Hyperion's substantial opportunity base. Management cautions that while encouraging, early test results may not be an accurate indicator of long term production rates.
Hyperion currently holds 35,680 gross (32,515 net) acres of Cardium rights in the Niton/McLeod area, including the previously announced farm in, with an average working interest of approximately 90%. Total Petroleum Initially In Place ("TPIIP") effective as of August 15, 2012, is internally estimated to be up to 171 MMbbls of light oil with a primary recovery factor of 11.7%. The Niton / McLeod area is characterized by up to 191 gross (172 net) Cardium horizontal drilling locations out of a corporate inventory of 214 gross (195 net) locations. These estimates are subject to change with varying economic conditions and future drilling results.
Previously, Hyperion drilled the 05-14 in the area and it continues to exceed expectations. The 05-14 horizontal well was drilled adjacent to a legacy well that produced material quantities of light oil and solution gas (approximately 110,000 bbls of light oil and 0.4 Bcf of natural gas). Despite experiencing localized pressure depletion (reservoir pressure of approximately 2,000 kPa realized versus virgin pressure in the area of approximately 9,000 kPa) from this vertical well, the 05-14 horizontal is continuing to produce at approximately 55 boe/d (76% light oil and NGLs) in its 7th month of production. This rate is close to Hyperion's internal Niton/McLeod type curve for a horizontal well unaffected by previous pressure depletion, demonstrating excellent rock quality.
Forward-Looking and Cautionary Statements
This press release contains certain forward-looking statements (forecasts) under applicable securities laws relating to future events or future performance. Forward-looking statements are necessarily based upon assumptions and judgments with respect to the future. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "projects", "plans", "anticipates" and similar expressions. These statements represent management's expectations or beliefs concerning, among other things, future operating results and various components thereof affecting the economic performance of Hyperion. Undue reliance should not be placed on these forward-looking statements which are based upon management's assumptions and are subject to known and unknown risks and uncertainties, including the business risks discussed above, which may cause actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. Accordingly, readers are cautioned that events or circumstances could cause results to differ materially from those predicted. These statements speak only as of the date specified in the statements.
In particular, this press release may contain forward-looking statements pertaining to the following:
-- the performance characteristics of the Company's oil and natural gas
-- oil and natural gas production levels;
-- capital expenditure programs;
-- the quantity of the Company's oil and natural gas reserves and
anticipated future cash flows from such reserves;
-- projections of commodity prices and costs;
-- supply and demand for oil and natural gas;
-- expectations regarding the ability to raise capital and to continually
add to reserves through acquisitions and development; and
-- treatment under governmental regulatory regimes.
The Company's actual results could differ materially from those anticipated in the forward-looking statements contained throughout this press release as a result of the material risk factors set forth below, and elsewhere in this press release:
-- volatility in market prices for oil and natural gas;
-- liabilities inherent in oil and natural gas operations;
-- uncertainties associated with estimating oil and natural gas reserves;
-- competition for, among other things, capital, acquisitions of reserves,
undeveloped lands and skilled personnel;
-- incorrect assessments of the value of acquisitions and exploration and
-- geological, technical, drilling and processing problems;
-- fluctuations in foreign exchange or interest rates and stock market
-- failure to realize the anticipated benefits of acquisitions;
-- general business and market conditions; and
-- changes in income tax laws or changes in tax laws and incentive programs
relating to the oil and gas industry.
These factors should not be construed as exhaustive. Unless required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Total Petroleum Initially-in-Place ("TPIIP") - is defined in the Canadian Oil and Gas Evaluation Handbook ("COGEH") as the quantity of petroleum that is estimated to exist originally in naturally occurring accumulations. TPIIP includes that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations, prior to production, plus those estimated quantities in accumulations yet to be discovered. There is no certainty that it will be economically viable or technically feasible to produce any portion of this TPIIP except for those portions identified as proved or probable reserves.
There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.
Barrels of oil equivalent (boe) may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet (mcf) of natural gas to one barrel (bbl) of oil is based on an energy conversion method primarily applicable at the burner tip and is not intended to represent a value equivalency at the wellhead. All boe conversions in this press release are derived by converting natural gas to oil in the ratio of six thousand cubic feet of natural gas to one barrel of oil. Certain financial amounts are presented on a per boe basis, such measurements may not be consistent with those used by other companies.
Estimated values contained in this press release do not represent fair market value.
FOR FURTHER INFORMATION PLEASE CONTACT:
Hyperion Exploration Corp.
President and CEO
Hyperion Exploration Corp.
Hyperion Exploration Corp.
Suite 2010, Calgary Place II
355 - 4th Avenue SW
Calgary, Alberta T2P 0J1