Press release from Marketwire
Brownstone Energy Partner Moves Drill to Kokopelli Leasehold
Initial Williams Fork Well to Spud
Tuesday, September 04, 2012
TORONTO, ONTARIO--(Marketwire - Sept. 4, 2012) - Brownstone Energy Inc. (TSX VENTURE:BWN)(OTCQX:BWSOF) ("Brownstone" or the "Company") today announces that it has been advised by the operator, Dejour Energy Inc. (NYSE AMEX:DEJ)(TSX:DEJ), that a drill rig has been contracted to drill the first well at Brownstone's 28% owned Kokopelli project in the Piceance Basin, Colorado and that the rig is now moving onto the location.
Brownstone has been advised that this well is expected to spud during the coming week and will be directionally drilled to the base of the Williams Fork, logged, with casing set during the third quarter of 2012. Successful completion of this well will secure for Brownstone and its partner the substantial portion of the proven and probable undeveloped reserves, ~60 BCFe including ~3.6MM barrels of liquids net to Brownstone, attributed to the Williams Fork section of this Kokopelli leasehold by independent engineers. Production is expected to be tied into existing gathering systems by year end.
This 2,200 acre project is ideally situated for exploitation of both the Williams Fork and Mancos hydrocarbon laden shale bodies immediately adjacent to Williams Energy (NYSE:WPX) and Bill Barrett Corporation (NYSE:BBG) who are both developing and producing their respective leaseholds to the east, west and north of the Company's acreage. Brownstone, through the operator, Dejour, has worked closely with important constituents including local citizenry and government, the Bureau of Land Management and the Colorado Division of Wildlife to develop a mutually acceptable development plan for this environmentally sensitive area. Construction of the first drilling pad commenced in the fourth quarter of 2011 with production expected to begin in the second half of 2012. According to National Instrument 51-101 standard in Canada, the reserves evaluation report for Brownstone's leases at Kokopelli Field effective June 30, 2011, performed by Gustavson and Associates of Boulder, Colorado, projects the before tax discounted net present value 10% (NPV10) of proved undeveloped (PUD) reserves valued at $34.6 million and proven plus probable undeveloped (2P) reserves valued at $74.5 million in the Williams Fork section net to Brownstone..
The initial drilling program has been reduced to reflect current commodity prices, but will allow the Company to secure these valuable assets for the long-term benefit of our stakeholders.