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, announces that early natural gas production at the Company’s flagship Kokopelli project has now exceeded 4,500 MCF/D of rich gas (1.181 MMBTU’s per MCF), as the four new Williams Fork completions continue to unload fracture fluid while flowing to sales at restricted rates.
As previously disclosed, these four wells were completed in the Williams Fork formation with eight fracture stages per well and placed into production under Dejour’s policy of green completions. To date, approximately one third of the fluid injected has been recovered and the wells continue to unload fluid at a combined rate of 850 BWP/D. Initial four hour well tests were performed on each well on August 24 and 25. The average well flow rate during the test period was 1,700 MCF/D, for a total of 6,800 MCF/D for the four wells, with a high of 2,100 MCF/D and a low of 1,300 MCF/D. Currently the well production is being choked back in order to facilitate the recovery of fracture fluids. Combined sales of natural gas from the four wells have increased steadily over the last month to 4,500 MCF/D (5,300 MMBTU’s per day). Additional production growth is expected as the wells continue to clean up following the hydraulic fracturing operation.
While Dejour maintains a 71.5% WI in the project, its share in the net revenue stream from these initial wells is ~25% before payout and ~40% after 150% of payout based on an updated financial deal with the Company’s Denver based drilling fund partner.
Dejour’s liquids rich gas is transported and sold through gathering, processing and transportation arrangements with WPX Energy Inc. (NYSE:WPX) and Williams Energy Services LLC. Condensate yield from the wells is estimated to be between 12 and 15 BBLS per MMCF. Exact condensate yield will be determined upon diminishment of water flow currently being experienced.