CALGARY, July 16, 2019 /CNW/ - Journey Energy Inc. (JOY – TSX) ("Journey" or the "Company") is pleased to provide an update on our Joint Venture with Kiwetinohk Resources Corp. ("Kiwetinohk") in the East Duvernay, including the encouraging test rates achieved by the first three wells.

East Duvernay Joint Venture Operational Update

Since entering into the Joint Venture arrangement on August 29^th, 2018, Kiwetinohk and Journey have been actively advancing the development of the East Duvernay property including:

• Expansion of the Duvernay Joint Venture land position to over 105,000 gross acres;
  
  
• Drilled, completed, and tested 3 wells with encouraging test results;
  
  
• Placed the initial two commitment phase wells on-production with excellent early results;
  
  
• Drilled, completed and flow tested an option well at 100/13-02-042-04W5/00;
  
  
• Drilled an option well at 100/16-12-044-04W5/00; and
  
  
• Licensed additional option wells at 100/12-07-042-03W5/00 and 103/03-29-042-04W5/00.

Two Well Commitment Phase Update

Kiwetinohk has drilled, completed, flow tested and placed on production the following commitment wells:

• Commitment well #1: HZ 102/16-15-042-03W5/00 (6,500m TMD; 3,590m horizontal length);
• Commitment well #2: HZ 102/15-31-042-03W5/00 (6,352m TMD; 3,413m horizontal length).

Further details on the drilling and completion of the commitment wells are included in Journey's year-end press release dated February 27th, 2019 and the test results were press released on April 15, 2019. Both commitment wells were tied-in and placed on production May 8, 2019. For the period from May 8, 2019 to July 8, 2019 inclusive, the following production results were achieved.

Production Summary:

These production rates continue to be on the higher end of our internal expectations. Both wells continue to be restricted.  In particular the 15-31 well continues to flow at a very high tubing head pressure. Water cuts have declined steadily throughout the flow period with current water cuts of 37% at 15-31 and 42% at 16-15.

Option Well 100/13-02-042-04W5/00 (6,072m TMD; 3,056m horizontal length)
Kiwetinohk spudded this well on February 26^th and rig released on March 31^st.  Prior to drilling the horizontal portion of the well, the vertical portion of the 8-16-042-04W5 well was logged through the Duvernay. This well is approximately 10 km away from the 6-28-042-03W5 stratigraphic test well ("6-28 Strat Well") at the heel of the commitment wells.  The logs confirmed the presence of the Duvernay zone in excess of 30 m in thickness, and with significantly higher interpreted porosity than the 6-28 Strat Well.

The horizontal lateral length in the Duvernay is approximately 3,056m.  The well was completed over 47 intervals utilizing approximately 5,900 tons of sand and 560,000 bbls of load water.  A brief clean up flow operation was conducted in early June.  After milling out the plugs and installing production tubing, the final flow test began on June 21 at 7:00pm.  Flow testing of the well continued until July 10, 2019 at 12:00 am.  The results of this initial clean up and final flow test are presented below.  The results show this well to be similar to the two currently producing commitment wells.  Flow rates generally increased throughout the test as the choke sizes were gradually increased from 3.97mm to 8.73 mm. In addition, the water cut decreased to less than 50% throughout the test.  The well produced little or no sand on the flow back.

Journey considers these preliminary results to meet or exceed its expectations.  Although preliminary in nature, the results continue to support our hypothesis that a significant portion of the joint venture acreage is within the oil window in a highly productive area of the East Duvernay.  With multiple commercial successes approximately 10 km apart, 2019 continues to be a transformational year for Journey.

Flow Test Summary:

Journey looks forward to updating our shareholders on future activities in the East Duvernay as further information becomes available.

About the Company 

Journey is a Canadian exploration and production company focused on oil-weighted operations in western Canada.  Journey's strategy is to grow its production base by drilling on its existing core lands, implementing waterflood projects, and by executing on accretive acquisitions.   Journey seeks to optimize its legacy oil pools on existing lands through the application of best practices in horizontal drilling and, where feasible, with water floods.  Journey is also in the early phases of advancing development of an unconventional shale resource play in the oil window of the Duvernay with its joint venture partner, Kiwetinohk Resources Corp.

FORWARD LOOKING STATEMENTS AND OTHER ADVISORIES

Information in this press release that is not current or historical factual information may constitute forward-looking information within the meaning of securities laws, which involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Journey, including, without limitation, those listed under "Risk Factors" and "Forward Looking Statements" in the Annual Information Form filed on www.SEDAR.com on March 27, 2019. Forward-looking information may relate to Journey's future outlook and anticipated events or results and may include statements regarding the business strategy and plans and objectives. Particularly, forward-looking information in this press release includes, but is not limited to, information concerning Journey's drilling and other operational plans, the drilling plans of Journey's joint venture partner, production rates, and long-term objectives. Journey cautions investors in Journey's securities about important factors that could cause Journey's actual results to differ materially from those projected in any forward-looking statements included in this press release. Forward-looking information contained in this press release about Journey's prospective funds flows and financial position is based on assumptions about future events, including economic conditions and courses of action, based on management's assessment of the relevant information currently available. Readers are cautioned that information regarding Journey's financial outlook should not be used for purposes other than those disclosed herein. Forward-looking information contained in this press release is based on current estimates, expectations and projections, which Journey believes to be reasonable as of the current date. No assurance can be given that the expectations set out herein will prove to be correct and accordingly, you should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While we may elect to, we are under no obligation and do not undertake to update this information at any particular time except as required by applicable securities law.

Readers are cautioned that the above list of risks and factors are not intended to be exhaustive. Additional information on these and other factors that could affect operating and financial results are, or will be, included in reports filed with the applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).

Barrel of Oil Equivalents

Where amounts are expressed in a barrel of oil equivalent ("BOE"), or barrel of oil equivalent per day ("BOE/d"), natural gas volumes have been converted to barrels of oil equivalent at six (6) thousand cubic feet ("Mcf") to one (1) barrel. Use of the term BOE may be misleading particularly if used in isolation. The BOE conversion ratio of 6 Mcf to 1 barrel ("Bbl") of oil or natural gas liquids is based on an energy equivalency conversion methodology primarily applicable at the burner tip, and does not represent a value equivalency at the wellhead. This conversion conforms to the Canadian Securities Regulators' National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities.

Oil and Gas Measures and Metrics

The Company uses the following metrics in assessing its performance and comparing itself to other companies in the oil and gas industry. These terms do not have a standardized meaning and therefore may not be comparable with the calculation of similar measures.by other companies:

1)  Corporate Decline is the rate at which production from a grouping of assets falls from the beginning of a fiscal year to the end of that year.

2)  IP 30 is the average daily production rate of a well in its first full calendar month of production expressed in boe's.

Select Abbreviations and Definitions

"Frac" means hydraulic fracturing, which is the process of creating fractures in rock formations by injecting sand and/or fluids at high pressures into their cracks to force them to open further and thereby allowing more oil and natural gas to flow out of the rock formations and into the wellbore.

No securities regulatory authority has either approved or disapproved of the contents of this press release.

SOURCE Journey Energy Inc.

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