Jan 26, 2012
CALGARY, Jan. 26, 2012 /CNW/ - (ARX - TSX) ARC Resources Ltd. ("ARC") released today its
2011 year-end reserves and resources information.
HIGHLIGHTS
Proved plus probable ("2P") reserves increased 18 per cent to 572 mmboe, comprised of 2.4 Tcf of natural gas and 170 mmbbls of liquids, at year-end 2011
Proved reserves increased eight per cent to 360 mmboe at year-end 2011
ARC achieved record production of 92,021 boe per day and 83,416 boe per day for the fourth quarter and full year 2011, respectively, due to a strong 2011 drilling program that delivered 13 per cent year-over-year production growth. Full year 2011 production was comprised of 62 per cent natural gas production and 38 per cent crude oil and liquids production.
ARC replaced 385 per cent of 2011 production, adding 117 mmboe of 2P reserves after the net divestment of non-core properties with associated 2P reserves of 14.6 mmboe in 2011
Finding and Development costs ("F&D") of $5.50 per boe for 2P reserves and $10.84 per boe for proved reserves excluding Future Development Capital ("FDC")
All-in annual Finding, Development and Acquisition ("FD&A") costs of $5.24 per boe for 2P reserves, excluding FDC, represent ARC's lowest annual FD&A costs since 2001
Recycle ratio of 5.3 times and 5.0 times for the current year and three year average, respectively, for 2P reserves based on 2011 F&D costs excluding FDC and 2011 netback of $29.16 per boe
Increase in 2P and proved Reserve Life Index ("RLI") to 17 years and 10.7 years, respectively, based on the mid-point 2012 production guidance of 92,500 boe per day
Crude oil and natural gas liquids ("NGL's") reserves comprise 30 per cent of total 2P reserves at year-end 2011
2P reserves per share increased 16 per cent and proved reserves per share increased six per cent relative to year-end 2010
Total 2P reserves for the Montney in NE B.C.increased to 1.9 Tcf of natural gas and 21 mmbbls of NGL's, a 48 per cent increase over year-end 2010 reserves of 1.3 Tcf of natural gas and 12.5 mmbbls of NGL's. Reserves have been assigned to 146 net sections on ARC's total land position of 434 net sections in this region.
ARC commissioned an Independent Resources Evaluation ("Resources Evaluation" or "Independent Resources Evaluation") for its Montney lands in the northeast British Columbia ("NE B.C.") Montney region (1). The findings confirm that the Montney is a significant long-term growth opportunity with considerable potential reserves, which go well beyond existing booked reserves and even the current estimates of the Economic Contingent Resource ("ECR"). In addition to year-end 2011 2P reserves of 1.9 Tcf of natural gas and 21 mmbbls of NGL's, the Resources Evaluation assigned an ECR best estimate of 4.1 Tcf of natural gas and 101 mmbbls of liquids. As part of this study and based on a zero per cent porosity cut-off, the estimate of Discovered Petroleum Initially in Place ("DPIIP") has increased to 25.5 Tcf (21.2 Tcf at a three per cent porosity cut-off) and the estimate of Total Petroleum Initially in Place ("TPIIP") was identified to be 50.4 Tcf (39.6 Tcf at a three per cent porosity cut-off). ARC estimates that approximately $54 million would need to be spent to drill and complete sufficient wells on ARC's land base in order to reclassify all of the TPIIP into DPIIP.
Total 2P reserves plus the ECR represent less than 13 per cent of the TPIIP based upon a zero per cent porosity cut-off (approximately 15 per cent of TPIIP based upon a three per cent porosity cut-off). ARC expects the ultimate recovery may exceed this level with the long-term natural gas price being the primary determinant of ultimate recovery.
ARC continues to update its long-term development plan as resource estimates grow with a range of scenarios being developed to reflect a range of potential recovery factors of the substantial NE B.C. Montney natural gas and liquids resource.
(1)
References to NE B.C. Montney pursuant to the Independent Resources Evaluation throughout this new release includes Dawson, Parkland, Tower, Sunrise/Sunset, Attachie, Septimus, Sundown, and Blueberry located in B.C. and Pouce Coupe located in Alberta.
RESOURCES AND RESERVES DISCUSSION AND ANALYSIS
The following discussion in "NE B.C. Montney Resources and Reserves", "Ante Creek Montney Resources and Reserves "and "2011 Operational and Property Review" is subject to a number of cautionary statements, assumptions and risks as set forth therein. See "Information Regarding Disclosure on Oil and Gas Resources and Operational Information" for additional cautionary language, explanations and discussion and "Forward Looking Statements" for a statement of principal assumptions and risks that may apply. See also "Definitions of Oil and Gas Reserves, Resources and Reserves". The discussion includes reference to TPIIP, DPIIP and ECR as per the GLJ Petroleum Consultants Ltd. ("GLJ") Resources Evaluation as at December 31, 2011, prepared in accordance with the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook"). Unless indicated otherwise in this news release, all references to ECR volumes are Best Estimate ECR volumes.
There is no certainty that it will be commercially viable to produce any of the resources that are categorized as discovered resources. There is no certainty that any portion of ARC's resources that have been categorized as undiscovered resources will be discovered. Furthermore, if discovered, there is no certainty that it will be commercially viable to produce any portion of such undiscovered resources.
MONTNEY RESOURCES AND RESERVES
ARC's inventory of value-creating opportunities continue to expand at a rapid pace with the Montney formation in NE B.C. being the primary area of major resource expansion. In both dry gas and liquids-rich gas resource plays, the cycle time from drilling the initial discovery well to significant production coming on-stream often requires new infrastructure such that our current internal development plans span well beyond the period of production growth included in our year-end reserves report. We have successfully continued to move DPIIP into ECR, ECR into 2P reserves and probable reserves into proved reserves at a steady pace. Notably, our year-end 2011 2P reserves have increased by an amount equal to the ECR estimate released just 12 months ago. Since ARC's strategic plan and capital allocation decisions are based upon our assessment of the complete scale of the identified opportunities, rather than the subset of those opportunities which are currently booked as 2P reserves or identified as ECR, the discussion presented herein focuses on our total resource opportunity.
The DPIIP and TPIIP estimates presented herein for the NE B.C. Montney formation have been prepared by our independent reserve evaluators, GLJ, based upon mapping supported by significant well control. As with any reserve or resource estimate, the value will change over time as new information becomes available. At this time, ARC believes the TPIIP to be the most appropriate estimate of the opportunity that exists for the NE B.C. Montney and forms the basis for our ongoing short-term and long-term strategic decisions. Therefore, it is extremely relevant to the discussion of our resource and potential future reserve opportunities.
When conducting reserve and resource assessments, the process traditionally includes estimates of the level of porosity in the rock below which the reservoir fluids are not expected to contribute to future production and reserves; this is referred to as the "porosity cut-off". In new resource plays where the technology is enabling our industry to extract commercial production rates from rock previously believed to be "too tight" to produce, it is uncertain as to what the correct porosity cut-off is. In the early days of developing the Montney formation at Dawson, ARC used a six per cent porosity cut-off which was subsequently reduced to three per cent based upon the performance of the wells. GLJ's resource assessment continues to reflect the use of a three per cent porosity cut-off, ARC however believes the three per cent porosity cut-off may be too high based on continued strong performance within Dawson. For the purposes of this disclosure, the DPIIP and TPIIP results do not impose a porosity cut-off unless otherwise indicated, therefore, the discussion and analysis becomes focused on what the best estimate of the recovery factor will be over time rather than adjusting the in-place resource estimates and the recovery factor on an ongoing basis. By removing the porosity cut-off, expected recovery factors have been lowered accordingly; future production performance will be used to refine the recovery factor estimates. Footnotes have been added to certain tables presented herein to identify how the referenced volumes would change if a three per cent porosity cut-off was to be imposed on the in-place volume calculation. For information purposes, ARC's TPIIP at a three per cent porosity cut-off is estimated to be 39.6 Tcf which represents 78 per cent of the estimated TPIIP of 50.4 Tcf at a zero per cent porosity cut-off; this speaks to the high quality of the Montney formation on ARC's lands.
NE B.C. Montney Resource Discussion and Analysis
The Montney formation in NE B.C. has been identified as a world class unconventional natural gas resource play with the potential for significant volumes of recoverable resources. The area includes both dry gas and liquids-rich gas opportunities. It is one of the largest and lowest cost natural gas resource plays in North America and is expected to serve as the anchor supply to support major liquefied natural gas ("LNG") projects currently being planned for the west coast of British Columbia. ARC has a significant presence in the region with a land position of 434 net sections; this represents one of the largest land positions of any operator in the most prospective areas of the play.
Since 2003, when ARC first established a presence in the region, we have become a key player having increased total 2P reserves from 110 Bcf to 1.9 Tcf of natural gas and 21 mmbbls of NGL's, increased production from 17 mmcf per day to 235 mmcf per day of natural gas and 1,800 bbls per day of liquids and significantly expanded its land base from 62 net sections to 434 net sections. At present, ARC's NE B.C. Montney portfolio includes ownership in Dawson, Parkland, Tower, Sunrise/Sunset, Attachie, Septimus, Sundown, and Blueberry. Although the Montney in this region is typically thought of as a dry gas reservoir, recent drilling conducted by ARC at Tower, Septimus and Attachie has tested liquids-rich gas and/or light oil.
In an effort to better understand ARC's long-term future reserve and resource potential in the NE B.C. Montney, GLJ was commissioned to conduct an Independent Resources Evaluation for ARC's lands in the region including Dawson, Parkland, Tower, Sunrise/Sunset, Attachie, Septimus, Sundown, and Blueberry in northeastern B.C and Pouce Coupe just across the border in Alberta (the "Evaluated Areas"). The Resources Evaluation was conducted effective December 31, 2011 based on GLJ forecast pricing as at January 1, 2012. All references in the following discussion to ECR, TPIIP and DPIIP are in reference to the Evaluated Areas included in the Independent Resources Evaluation. See "Definitions of Oil and Gas Resources and Reserves".
The following map illustrates the Evaluated Areas included in the Independent Resources Evaluation.
Following is a summary of ARC's land base within the Evaluated Areas.
Table 1
NE B.C. Montney Resources and Reserves Land Base - December 31, 2011(1)
Evaluated Areas
ARC Lands Net
Sections
Net sections
with DPIIP
Net sections
with
2PReserves
Liquids Yield
(bbls/mmcf)
Dawson
129
119
74
5
Parkland
23
23
20
20 - 40
Tower
48
35
6
50 - 200
Sunrise/Sunset
32
32
27
5
Attachie
115
78
10
30 - 200
Septimus
22
20
7
5 - 30
Pouce Coupe
26
21
2
5
Sundown
18
6
0
5
Blueberry
21
5
0
0 - 200
TOTAL NET SECTIONS
434
339
146
DPIIP has been assigned on 339 net sections, representing 78 per cent of ARC's land base of 434 net sections in the Evaluated Areas. To date, 2P reserves have been assigned on 146 net sections, representing 34 per cent of ARC's landholdings in this region.
In addition to consistently adding reserves at a low F&D cost, ARC has developed an inventory of ECR in excess of the 2P reserves in the NE B.C. Montney region. GLJ has estimated the 2P reserves to be 1.9 Tcf of natural gas and 21 mmbbls of NGL's. In addition to 2P reserves, GLJ has estimated the ECR to be 4.1 Tcf of natural gas and 101 mmbbls of NGL's effective December 31, 2011, up significantly from 0.7 Tcf of natural gas and 4 mmbbls of NGL's at year-end 2010. TPIIP of 50.4 Tcf was assigned on ARC's 434 net sections of Montney lands in NE B.C. The TPIIP is comprised of 25.5 Tcf of DPIIP and 24.9 Tcf of UPIIP. The following tables summarize the results of the Independent Resources Evaluation.
Table 2a
Resource Categories (1)(2)(3)
Tcf
Total Petroleum Initially In Place (TPIIP)
50.4
Discovered Petroleum Initially In Place (DPIIP)
25.5
Undiscovered Petroleum Initially In Place (UPIIP)
24.9
(1)
TPIIP, DPIIP and UPIIP have been estimated using a zero percent porosity cut-off which means all gas
bearing rock has been incorporated into the calculations. Using a three per cent porosity cut-off the
TPIIP, DPIIP and UPIIP estimates would be 39.6 Tcf, 21.2 Tcf, and 18.4 Tcf, respectively.
(2)
The Resource Categories do not include the free oil/liquids or associated solution gas in the Tower field.
Refer to Tower commentary in "2011 Operational and Property Review".
(3)
All volumes in table are company gross and raw gas volumes.
Table 2b
Reserves and Economic Contingent Resources (1)(2)(6)
Low
Estimate
Best
Estimate
High
Estimate
Natural Gas (Tcf)
Reserves (3)
1.0
1.9
2.4(4)
Economic Contingent Resources
2.5
4.1
5.7
Natural Gas Liquids(mmbbls) (5)
Reserves (3)
11.3
21.1
26.6
Economic Contingent Resources
64.2
101.0
133.9
(1)
All DPIIP other than cumulative production, reserves, and ECR has been categorized as unrecoverable.
(2)
All volumes in table are company gross and sales volumes.
(3)
For reserves, the volume under the heading Low Estimate are proved reserves, the volume under the heading
Best Estimate are 2P reserves and the number under the heading High Estimate are 2P plus possible
reserves.
(4)
This volume is an arithmetic sum of multiple estimates of reserves, which statistical principles indicate may
be misleading as to volumes that may actually be recovered. Readers should give attention to the
estimates of individual classes of reserves and appreciate the differing probabilities associated with each
class.
(5)
The liquid yields are based on average yield over the producing life of the property.
(6)
Cumulative production has been 0.2 Tcf on a raw basis.
Table 2c
Prospective Resources (1)(2)
Low
Estimate
Best
Estimate
High
Estimate
Natural gas (Tcf)
2.9
4.0
5.3
Natural gas liquids (mmbbls)
69.0
98.0
131.2
(1)
All UPIIP other than Prospective Resources has been categorized as unrecoverable.
(2)
All volumes in table are company gross and sales volumes.
TPIIP consists of both DPIIP and UPIIP. In the Independent Resources Evaluation, DPIIP was generally ascribed to ARC's properties which were located within a three mile radius of a hydrocarbon test, and UPIIP was ascribed to ARC's properties which were located outside of a three mile radius but within an area where the reservoir is believed to contain hydrocarbons. TPIIP is a raw gas number and in some areas contains variable amounts of hydrocarbon liquids (propane, butane and condensate). Management estimates that approximately $54 million would need to be spent to drill and complete sufficient wells on ARC's land base within a three mile radius of known gas tests in order to reclassify the UPIIP to DPIIP.
Resource plays of this nature evolve based upon increased knowledge and confidence derived from ongoing drilling and production activities. The following table illustrates the growth which has been delivered in NE B.C. Montney reserves and resources in the Evaluated Areas over the past five years.
Table 3
NE B.C Montney Historic Reserves and Resources
Proved plus Probable Reserves
Economic Contingent Resource
DPIIP
Natural Gas
Tcf
NGL's
mmbbls
Natural Gas
Tcf
NGL's
mmbbls
Tcf
2011 (1)
1.9
21.1
4.1
101.0
25.5
2010 (2)
1.3
12.5
0.7
4.0
10.1
2009
0.8
3.4
NA
NA
NA
2008
0.5
2.1
NA
NA
NA
2007
0.2
1.0
NA
NA
NA
(1)
Represents the Evaluated Areas included in the 2011 GLJ Independent Resources Evaluation.
(2)
2010 Evaluated Areas included Dawson, Parkland, Sunrise/Sunset, Septimus, and Sundown.
While the year-over-year growth in ECR has been exceptional, the total of cumulative production to date, 2P reserves and ECR still represents less than 13 per cent of the TPIIP, a clear indication of the early stage of the development of ARC's NE B.C. Montney assets. Based on ARC's track record of successfully converting ECR into reserves and growing ECR, management expects that the ECR and reserves will continue to grow as drilling progresses.
This significant growth in reserves and resources is the result of the utilization of multi-stage fracture stimulation of horizontal wells, a technique that ARC pioneered in the Dawson area in 2005. In addition to utilizing this technology throughout our Montney lands, ARC is utilizing horizontal drilling with multi-stage fraccing across our Western Canadian asset base and recently has had success in oil prone reservoirs such as Pembina Cardium, Ante Creek and Goodlands. As evidenced in Table 3, both the DPIIP and ECR have increased considerably over a short period of time. It is for this reason we have now chosen to publish our TPIIP estimate since it is less variable and does in fact form the basis for understanding the progression of resource quantification to commercialization.
ARC has successfully grown its NE B.C. Montney production from 45 mmcf per day in 2008 to over 235 mmcf per day of natural gas and 1,800 bbls per day of liquids at present. This growth has been achieved through staged development and the deployment of an average of $245 million of capital investment per year over the past three years. To continue this growth, significant additional capital will be required. ARC's 2P reserves in the NE British Columbia Montney region now stand at over 1.9 Tcf of natural gas and 21 mmbbls of NGL's. As the 2P reserves grow, the amount of FDC required to bring the reserves to production also increases. The FDC for this region is now estimated by GLJ in our reserve report to be $2.1 billion. We believe the ultimate potential extends well beyond the currently booked 2P reserves and ECR; accordingly, the future capital requirements will also be significantly greater.
As we continue to evolve the development plan for our NE B.C. Montney assets, our perspectives on the ultimate production potential of the assets also continues to evolve. We estimate that the currently assigned 2P reserves plus the current estimate of ECR (combined resource of 6 Tcf of natural gas and 123 mmbbls of liquids) could sustain a peak production rate up to 800 mmcf per day of natural gas and 17,000 bbls per day of liquids for ten years. This compares to fourth quarter 2011 production from this area of approximately 235 mmcf per day of natural gas. As previously stated, the cumulative production to date plus currently booked 2P reserves and the current best estimate of ECR represents less than 13 per cent of the TPIIP, therefore higher recovery factors could lead to higher production rates. The key determining factor in what the ultimate recovery and associated peak production rate will be is expected to be the price of natural gas in the long-term. It is within this context that ARC's long-term development plan for the assets has been developed and is being refined.
ARC's long-term development plan focuses on the highest rate of return projects across our asset portfolio. We are also focused on maintaining a high level of capital discipline as has been exhibited since our inception. In the prevailing environment of low natural gas prices, near-term development of dry gas projects is not a priority. ARC is fortunate to be in properties such as Dawson where we are centered on the "sweet spot" of a dry gas resource and returns remain competitive, even at a Cdn$3 field gas price. However, further near-term investment in new dry gas developments will likely be deferred in favour of liquids-rich opportunities that offer higher rates of return.
ARC's successful 2011 drilling programs at Tower and Attachie proved up discoveries of liquids-rich gas with the liquids content ranging from 30 to 200 bbls of liquids per mmcf of raw gas. ARC will continue to exploit these reservoirs and expand our understanding of long-term potential as evidenced by the planned seven well program at Tower in our 2012 budget. These new high liquids yield projects are very compelling; however, a better understanding of long-term production performance of both the natural gas and liquids components of these properties is required before full scale development can occur.
Early stage drilling in high quality reservoirs at Attachie, Sunrise, Parkland, Tower and Dawson are indicating significant future resource opportunities in excess of our 2P reserves and, we believe, in excess of the current estimate of ECR. While providing significant future growth opportunities for ARC, an asset of this nature also poses unique challenges to our organization. The most important strategic question we are addressing is how to extract the greatest value for our shareholders while managing the technical, market and execution risks inherent in a world class asset of this nature. Key considerations with respect to the future risk managed value creation from the assets are both the pace of development and how we fund the very significant capital required to fully develop the resource. Equally important is understanding the implications of developing significant new natural gas production in what appears to be a well-supplied North American market. These issues are well understood by ARC's management team and our long-term strategic development plan continues to evolve with the size and scope of our opportunities and developments in the market.
Based upon the forgoing analysis and ARC's expertise in the Montney formation in NE B.C., it is expected that significant additional reserves will be developed in the future with continued drilling success on currently undeveloped Montney acreage together with further development, completion refinements and improved economic conditions. Historic drilling success and recoveries on the more fully developed Montney acreage, abundant well log and production test data, and the application of increased drilling densities support ARC's belief that significant additional resources will be recovered. Continuous development through multi-year exploration and development programs and significant levels of future capital expenditures are required in order for additional resources to be recovered in the future. The principal risks that would inhibit the recovery of additional reserves relate to the potential for variations in the quality of the Montney formation where minimal well data currently exists, access to the capital which would be required to develop the resources, low gas prices that would curtail the economics of development and the future performance of wells, regulatory approvals, access to the required services at the appropriate cost, and the effectiveness of fraccing technology and applications. The contingencies that prevent the ECR from being classified as reserves are due to the early evaluation stage of these potential development opportunities. Additional drilling, completion, and test results are required before these contingent resources are converted to reserves and a larger component of DPIIP is converted to ECR.
ANTE CREEK MONTNEY RESOURCES AND RESERVES
In addition to the NE B.C. Montney, ARC also has a significant land position in the Montney oil and liquids-rich gas resource play at Ante Creek in northwestern Alberta. Over the past 11 years ARC has strategically amassed land holdings of over 260 net sections of land at Ante Creek. 2P reserves at Ante Creek of 47.2 mmboe are comprised of 43 per cent liquids and account for eight per cent of ARC's total 2P reserves. This property will provide material production growth in 2012 and will also be a key property for future development. The Ante Creek property was not included in the Independent Resources Evaluation and therefore has no independent assessment of ECR, DPIIP or TPIIP. During the course of 2012, ARC will be working with GLJ to conduct a similar analysis at Ante Creek as the one which was conducted in the NE B.C. Montney. It is our expectation that similar to the NE B.C. Montney, significant unbooked resource potential will be identified at Ante Creek.
2011 OPERATIONAL AND PROPERTY REVIEW
ARC had another year of exceptional drilling results in 2011. Since year-end 2008, ARC's 2P reserves have almost doubled to 572 mmboe, while our F&D costs and associated recycle ratios have been among the best in the industry. The NE B.C. Montney region has been the primary driver of this strong performance with reserves increasing by approximately 300 per cent since year-end 2008 and production increasing from 45 mmcf per day to 235 mmcf per day of natural gas and 1,800 bbls per day of liquids at present.
During 2011 ARC spent $726 million to execute its capital program. ARC's 2011 capital spending included $92 million on facilities and an investment of $75 million in undeveloped land. ARC drilled 164 gross (154 net) wells on operated lands with a 100 per cent success rate. A significant portion of ARC's 2011 capital program was focused on resource play development with $240 million (33 per cent of the 2011 capital spending) being allocated to the Montney region in NE B.C. and Ante Creek in Alberta.
ARC's 2011 capital development program yielded 2P reserve additions of 132 mmboe, representing a 433 per cent replacement of 2011 production through internal development. ARC divested of certain non-core properties in 2011 with attributed 2P reserves of 14.6 mmboe, net of acquisitions. ARC's total reserve additions were 117 mmboe after the net divestment of properties, representing a total 2011 production replacement of 385 per cent. This is the fourth year in a row that ARC has been able to replace greater than 200 per cent of production from internal development activities.
The following discussion includes well flow-test results which are not necessarily indicative of long-term performance or of ultimate recovery from the subject wells.
Dawson
In 2011, ARC drilled 12 wells in the Dawson field and increased production to 165 mmcf per day with the commissioning of the second 60 mmcf per day Gas Plant. The 2P reserves increased 15 per cent from 882 Bcf to 1,012 Bcf.
As a result of well productivity in Dawson continuing to exceed expectations, ARC has a sufficient inventory of wells waiting to be brought on-stream to maintain current production of 165 mmcf per day throughout 2012. ARC plans to drill one well at Dawson in 2012 to retain lands which would otherwise expire.
Parkland
At Parkland, the Upper Montney section is approximately 100 meters thick with significant portions having greater than six per cent porosity. ARC drilled 10 wells at Parkland in 2011. ARC believes that existing horizontal wells are not draining the complete thickness of the Montney, and therefore requires a second horizontal well, beneath the existing ones to effectively drain the entire section. During 2011, ARC drilled its first well into the lower portion of the upper Montney beneath an existing well bore and realized a one month initial production rate ("IP") of 4.7 mmcf per day which is similar to the upper well. No communication between the two wells has been seen to date. Should this continue to be the case, the future drilling inventory at Parkland will expand considerably.
The year-end 2011 2P reserves increased 28 per cent to 49.7 mmboe from 38.8 mmboe at year-end 2010 after the production of 3 mmboe in 2011.
Tower
ARC's 48 net sections of contiguous land north and west of the Parkland field is referred to as Tower. When ARC acquired this land in 2010, it was considered to be a potential very tight oil play which was unproven at the time of the acquisition. Since that time, ARC has realized a significant liquids-rich hydrocarbon opportunity. ARC drilled three horizontal wells in the Tower field in 2011 applying newly developed multi-stage fracture stimulation techniques. The 13-8-82-17 well was flowing at 610 boe per day (340 bbls per day of 45º API oil, condensate and natural gas liquids and 1.7 mmcf per day of gas) at the end of a 23 day production test. The 5-14-81-17 well was flowing at 405 boe per day (240 bbls of 47º API condensate and natural gas liquids and 1.0 mmcf per day o