CARPINTERIA, CALIFORNIA--(Marketwire - Feb. 22, 2010) -
NOT FOR DISTRIBUTION TO THE U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES OF AMERICA
NiMin Energy Corp. ("NiMin" or the "Company") (TSX:NNN)(OTCQX:NEYYF) today announced an operational update for its projects in Wyoming and California, as well as, entering into an oil hedge contract.
- Wyoming: completed drilling the first new well in the Ferguson Ranch oil field and encountered 163 net feet of oil pay-
- California: initial positive response from the Combined Miscible Drive project at Pleito Creek-
- Oil Hedge: recently hedged the future sale of 7,500 barrels of NYMEX West Texas Intermediate crude oil per month at a fixed price of $85.10 per barrel for a period of twenty-four months.
Wyoming Operations
The first new well in the Ferguson Ranch oil field in Wyoming, the Ferguson Ranch State #11, was spud on February 3, 2010, and was drilled to a total depth of 3,950 feet. The Ferguson Ranch State #11 is an infill development well designed to produce from the Tensleep and Phosphoria formations and is the first well drilled in the field in fifteen years. The well encountered a total of 163 net feet of oil pay (134 feet in the Tensleep and 29 feet in the Phosphoria formations), which is consistent with the Company's expectations and offset wells in the field. The Company is currently completing the well in both formations and anticipates results from production testing within 30 days.
"Our first well was drilled less than three months after closing the Wyoming acquisition and is an endorsement of our technical and operational staff's ability to execute," said Clancy Cottman, NiMin's Chairman and CEO. He continued, "This is the first location in our 88 well drilling program."
NiMin acquired four producing oil fields in Park County, Wyoming in December 2009. The fields have approximate daily gross production of 370 barrels per day of 14 and 18- degree API gravity oil from the Tensleep and Phosphoria formations, respectively. A wholly-owned subsidiary of NiMin operates all four fields. On February 11, 2010, the Company filed a Business Acquisition Report with regards to the acquired fields in Wyoming, available on www.sedar.com.
California Operations
NiMin reports an initial positive response from the Combined Miscible Drive ("CMD") project at Pleito Creek field in Kern County, California. The Company has now injected 120 million cubic feet of oxygen, and the reservoir pressure in the Phase I area gas cap has doubled from approximately 750 to 1,500 pounds per square inch, which is the targeted reservoir pressure for the CMD process. The H-2 horizontal well that offsets the CMD injection well is now producing 107 barrels of oil per day, approximately 44 barrels of oil per day above the natural decline rate of the well. In addition, the gravity of the oil has been upgraded from 17 to 19.9 degrees API.
"We are very excited to see confirmation that the CMD process is working and yielding an initial production response," said Rick McGee, NiMin's Chief Operating Officer.
The Company anticipates further production increases in the field with continued oxygen injection into the Santa Margarita formation.
The Pleito Creek field is 100% owned and operated by NiMin and produces approximately 220 barrels per day of 18 degree API oil. In 2007, NiMin redeveloped the Santa Margarita formation with four horizontal wells for primary production. In May 2009, NiMin implemented a new enhanced oil recovery technology, CMD, that combines the benefits of a CO2 flood, steam flood and gravity drainage to enhance recovery and increase oil production rates.
Oil Hedge
The Company recently entered into a swap contract with BP Corporation North America Inc. to minimize the variability in cash flows due to price movements in crude oil. The Company hedged the future sale of 7,500 barrels of NYMEX West Texas Intermediate crude oil per month at a fixed price of $85.10 per barrel effective January 1, 2010, for a period of twenty-four months. The hedged volumes represent less than 50% of the Company's production.
About NiMin
NiMin Energy Corp. is a Canadian corporation traded on the TSX with headquarters in Carpinteria, California. NiMin is an independent oil and natural gas company with drilling and production operations in California, Wyoming and Louisiana. See current presentation at www.niminenergy.com.
The Company recently relocated its corporate offices to 1160 Eugenia Place, Suite 100, Carpinteria, CA 93013.
