QIS Update #7 2012 - February 20th 2012
Included in this update:
- Blackbird Energy (BBI:TSX-V) announces third Montney horizontal well spud and operational update
- Take Another Look – Dalmac Energy (DAL:TSX-V)
As mentioned in our latest updates, we have two upcoming Small-Cap Conferences. On March 15, we will be in Calgary for an evening investment conference at the Coast Plaza Hotel and Conference Centre. In addition, we will be in Vancouver on April 10 with another slate of companies and guest speakers to provide some engaging presentations to investors at the Vancouver Convention Centre. We are actively looking for a few more presenters, so feel free to pass this information along to a company or management group that may have an interest in attending and/or presenting. For more information on these events and to register to attend, please visit: www.smallcapconference.ca. As always, attendance is free for all investors.
A few weeks ago we reported that Dalmac Energy (DAL:TSX-V) was trending ahead of financial projections and plans to announce its Q3 results in early March. The stock has moved about 15% higher, but remains trading at about 3 times expected f2012 (ending April 30) earnings. We encourage investors to take a good look at the company and its improving fundamentals prior to the announcement of Q3 financial results.
Please feel free to email us anytime at email@example.com or call us at (250) 377-1182. We look forward to your comments, questions, and feedback.
Blackbird Energy Inc. (BBI:TSX-V)
Current Price: $0.18 (coverage commenced Aug 19/11 - $0.18)
Blackbird Energy Inc. has announced that, further to Blackbird's news release of January 17, 2012, Donnybrook Energy Inc. has informed the company that the third Montney Horizontal well at Bigstone is scheduled to spud within two weeks from a surface location at 4-28-60-22 W5M and will be an extended reach Hz well with approximately 2,700 metres of lateral length planned to a bottom hole location at 13-33-60-22 W5M.
Operational Update on Second Montney Horizontal Well
Production tubing has been installed in the Bigstone Hz 15-32-60-22 W5M well and a seven day production test has been completed. The well flowed at an average rate of 1.1 mmcf/d. As previously reported, a review of the 23 stage hydraulic fracture stimulation that was performed on the well indicates that only 5 of the 23 stages of the planned fracture program were successfully stimulated. This rate is consistent with the interpretation that only 5 of the 23 stages are contributing to the well's production. As a result the reported well completion test rates do not reflect the quality of reservoir the well encountered while drilling. The 15-32 well encountered 2,744 metres of high quality Montney reservoir with strong gas shows and excellent penetration rates. The reservoir encountered is comparable to the Montney interval that was successfully completed in the Blackbird Hz 14-29-60-22 W5M Bigstone discovery well (37.5% BPO; 25% APO). The 14-29 well has a 1,200 metre lateral length and tested 4.3 mmcf/d of natural gas and 295 barrels of condensate per day - a ratio of 70 barrels of NGLs per mmcf of gas (1,011 barrels of oil equivalent per day).
Bigstone is located in an area of significant industry activity and recent drilling and completion successes. A 2,760 metre extended reach horizontal well has been recently drilled and completed by an industry competitor offsetting Blackbird's lands 800 metres to the west and parallel to Blackbird's 14-29 well. This well terminated approximately 200 metres from Donnybrook's land block. The operator of the well reported a final 24 hour test rate, after a 4 day flow period, of 12.5 mmcf/d of natural gas and 770 barrels of condensate per day and an estimated 30-35 barrels of condensate per mmcf. This well further demonstrates the potential of the Montney reservoir to the west and indicates the reservoir continues to the northwest onto Blackbird's land block.
Construction of Pipeline and Surface Facilities
Construction operations for the pipeline and surface facilities connecting the 14-29 and 15-32 wells is projected to start late February with wells and facilities ready for production to start by April 1st, 2012.
Unsecured Loan Facility
Blackbird also announces that it has entered into unsecured loan agreements with certain of its directors/officers and several third parties for the provision of loans in the aggregate amount of $1,015,000, the purpose of which is to help fund the company's obligations in respect of the Bigstone Project, specifically in regards to the construction of the pipeline and surface facilities. The loans are for a one year period and are subject to an annual interest rate of 20%, payable in full at maturity. The terms of the loans permit the company to prepay all or part of the loans at any time and from time to time without bonus, penalty or premium. Approximately 70% of the loan funds were provided by directors and officers of the company.
Garth Braun, Chief Executive Officer and Director of Blackbird, commented, we are very pleased to announce these two major developments in regards to first, the status of the second Montney well and the positive results therefrom, despite the completion issues that were encountered, and second, the commencement of the installation of the production infrastructure. We are now very excited about proceeding onto the third well.
QIS Capital Comments:
Following the disappointment of the mechanical failure in the second well, Blackbird is preparing to move forward with its third well which will begin drilling on the most easterly section of its land package. The third well is expected to be drilled with a 2,700m lateral length which is consistent with other high-impact wells drilled in the immediate area. The company further announced the completion of a loan agreement which will fund its portion of the pipeline and gathering system. This system is being built to accommodate up to 10 producing wells and is expected to begin production during April 2012 from the first three wells. Blackbird expects to have further announcements in the very near future regarding the spudding of its third well and other corporate developments.
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 93,500 shares and 450,000 options of Blackbird Energy Inc. and 25,500 shares and 200,000 options of Dalmac Energy 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.