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QIS Update #3 2012 - January 24th 2012

Included in this update:

  • Virtutone Networks introduces new web-based management portal: SNAP!
  • Delphi Energy, a neighbor to Blackbird Energy, announces significant Montney well



The QIS Capital Trading Summary is now active again in 2012 with four stock trades performed to-date. We’ll be posting a regularly updated virtual portfolio to track its success throughout the year. Check it out on the website at: .

We continue to work towards the launch of a new website and we should be able to provide you with more information on the new site very soon.


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Virtutone Networks Inc. (VFX:TSX-V)
Current Price: $0.14 (coverage commenced Sep. 9/11 - $0.10)


Virtutone Networks Inc., a leading provider of Internet-based telephony services, introduced today its Simple Network Access Portal (SNAP!) which allows Virtutone customers and resellers to quickly provision and manage Voice over Internet Protocol (VoIP) lines from any internet connection in the world. Virtutone has taken a leadership role in the development of web-based provisioning tools for VoIP services, allowing its customers to activate new lines within minutes instead of days or weeks. Using SNAP!, Virtutone's customers can provision SIP lines (voice or fax ) from over 9,000 local exchanges in North America, any exchange in Australia, United Kingdom, and in over other 60 countries worldwide.


SNAP! is an extremely advanced provisioning tool for the VoIP industry today, which allows our customers to activate new voice or fax lines in almost any area code or exchange in North America, Australia, United Kingdom and in over 60 other countries. This is especially important to companies who supply communication packages to oil and gas drilling rigs in North America. A drilling rig may be in one state for several weeks and then quickly move to another. Each move requires new telephone numbers. While it takes other VoIP providers days, or even weeks, to provision a new telephone number, Virtutone's customers can provision voice lines themselves in just minutes, providing them a significant advantage. The development of SNAP! will help Virtutone to advance its position as a leading provider of VoIP and Fax over Internet Protocol (FoIP) to the drilling segment of the oil & gas Market as well as open up new markets that need a simple way to activate and deactivate lines and telephony features. said Jason Allen, Virtutone's President & Chief Executive Officer.


QIS Capital Comments:


This is a significant new product for Virtutone and positions the company for continued growth specifically in the oil and gas servicing industry but also in other industries that require portable telephone services across state or provincial boundaries. The company continues to build on its recurring revenue base and expects to show significant growth in revenues and earnings over the next 12 months.


Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.24 (coverage commenced Aug 19/11 - $0.18)


On January 19, 2012, Delphi Energy (DEE:TSX) announced a significant Montney with a location adjacent to Blackbird Energy’s Bigstone property interest. Included below is the bulk of Delphi’s latest press release.


At Bigstone East, Delphi’s first horizontal well targeting the Montney formation (100% working interest) was successfully completed and flow tested at an average rate of 12.5 million cubic feet per day (mmcf/d) over the final 24 hours of the four day flow period. The well was also producing approximately 770 barrels per day (bbls/d) of condensate at the end of the test, although 100% of the frac fluid hadn't been recovered. Shallow-cut plant recoveries of natural gas liquids (NGLs) are expected to yield an additional 30 to 35 bbls/mmcf.


Completion operations consisted of a 20 stage oil-based frac program placed over the 2,760 metre extended-reach horizontal section of the well after successfully drilling the well to a total measured depth of 5,618 metres. The drilling operation was completed as planned with the full length of the horizontal section encountering the anticipated reservoir quality rock. The extended-reach horizontal section is up to twice as long as earlier horizontal wells in the area and is designed to reduce the number of wells required for full development by up to 50% with total project cost savings of approximately 35%.


The Delphi Bigstone East 1-19 well is immediately offsetting a competitor's well with a 1,254 metre horizontal length and reported test rates of approximately 4.3 mmcf/d of natural gas and 295 bbls/d of condensate. In the Fir area, located approximately three miles (five kilometres) to the south of Bigstone East, nine horizontal wells have now been drilled. Test rates reported to date range from 3.5 mmcf/d of natural gas and 225 bbls/d of condensate, from a well with a 1,200 metre horizontal length, to a high of 15 mmcf/d of natural gas and 750 bbls/d of condensate, from a well with over 2,500 metres of horizontal length. Reported drilling success in the area continues to validate Delphi's interpretation of a large contiguous liquids-rich natural gas deposit within the Montney formation in the greater Bigstone/Fir area.


A second Montney well at 5-14-60-23W5M, located three miles (five kilometres) southwest of the 1-19 well has commenced drilling and is anticipated to reach a total measured depth of 5,800 metres in approximately four weeks. A similar frac program is expected to be undertaken as part of the completion operations on this well.


The company has an inventory of approximately 100 horizontal Montney locations identified on its 45 gross (41.5 net) sections of land in Bigstone. Other emerging light oil and liquids-rich natural gas plays in the Nordegg and Duvernay formations being drilled by industry at Bigstone offer additional potential on company lands.


Delphi expects to commence construction in February on its 100 percent owned compression and field gathering infrastructure with initial capacity of 30 mmcf/d. Production from Delphi's Montney wells at Bigstone East is expected to commence in April, with start-up of these facilities.


QIS Capital Comments:


This Dephi well is immediately offsetting Blackbird's first two high impact wells – the second of which is currently being fraced and tested. Blackbird's second well is being drilled about 200m to the east and parallel to its first successful well. The Delphi well had a lateral leg of 2,760m with a 20-stage frac and Blackbird's second well has a lateral leg of 2,744m and is scheduled for up to a 24-stage frac. Delphi had tremendous success with its first Bigstone well and we’re keeping our fingers crossed for good news shortly on Blackbird’s second well drilled next door.


Disclaimer: This article is for informational purposes only. The information contained within this article should not be construed as offering investment advice. Those seeking direct investment advice should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock. The author(s) owns directly or indirectly 101,000 shares and 450,000 options of Blackbird Energy Inc. and 394,500 shares of Virtutone Networks Inc. QIS Capital has a financial relationship with these companies and may trade in the stocks mentioned. No stock exchange has approved or disapproved of the information contained herein. Copyright © 2003 - 2012 QIS Capital Corporation.

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