Dejour Energy Inc. (NYSE MKT: DEJ / TSX: DEJ), an independent oil and natural gas exploration and production company operating in North America's Piceance Basin and Peace River Arch regions, today provides an update on field operations at its 72% owned and operated Kokopelli project in Western Colorado.
The Company remains on schedule for the start-up of a new three well drilling program at Kokopelli before the end of March. Mobilization of Patterson-UTI (NASDAQ: PTEN) Rig #313 to Dejour’s Drill Pad 21-A has begun. At the conclusion of the three well program, the Company has contracted with Halliburton (NYSE: HAL) to commence completion of all four wells (including Federal Well 6-7-16-21 which was drilled in November).
Dejour is currently finalizing a gas transportation and processing agreement with a major midstream operator in the Piceance. Under the terms of the agreement, Dejour will maintain ownership of all NGL’s recovered at the third party processing plant and sell both the NGL’s and the residual gas at the tailgate of the plant.
“We are beginning the process of converting the Kokopelli asset from a proven undeveloped and probable reserve to a proven developed producing reserve that we expect to grow with time to over a net 120 BCF natural gas with 15 MM barrels of condensate/liquids in the Williams Fork,” says Harrison Blacker, Dejour COO.Of significant interest to the Company are recent activities targeting the deeper Niobrara-Mancos zones in proximity to Dejour leaseholds within the Piceance Basin. A recent announcement by WPX Energy (NYSE: WPX) of a successfully completed Lower Mancos (Niobrara) Hz producer, in Garfield County, states that a new producer has averaged 12 MMCF/d of restricted flow production during the first 30 days. WPX further announced its intention to drill 2 additional Hz wells in 2013 adding that the encouraging production results of these new wells indicate that the Piceance Basin recoveries, including the Niobrara-Mancos, offer the potential to at least double the Company’s net reserves in the Piceance.