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Halo Exploration's Latest Montney Test Well Confirms Asset; Talks Future Development

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   |    Thursday,September 24,2020

Halo Exploration Ltd. reported test results from its HALO HZ MCKINLEY 5-21-65-22 upper Montney well.

The 5-21 Montney oil well has now been on continuous production for 51 days.

• Up to September 17, the well flowed at a restricted rate that averaged 1,044 Bbls/d of total fluid and 640 Boe/d (78% of 40˚ API oil) with a 52% water cut.
  

• In the last 48 hours the well averaged 949 Boe/d (76% of 40˚ API oil) with a 38% water cut. To date, Halo has recovered 65% of the load fluid used during fracture stimulation.

Total drill and completion costs for the 5-21 well were CAD $4.4 million. Halo expects future drill and completion costs to average CAD $4.0 million.

Geoff Cain, President and CEO of Halo Exploration, said: “The 5-21 upper Montney test result firmly establishes the commercial nature and running room of Halo’s oil weighted asset base. Horizontal drilling and fracture stimulation of more conventional Montney reservoirs (with higher porosity & permeability than typical unconventional reservoirs) has placed Halo on a development path to meaningful free cash flow. The highly economic nature of the Company’s inventory combined with an active risk management program will allow Halo to navigate this unprecedented time of low prices and market volatility, as will support by Proof Capital through its election to fund tranche 2 of its term loan on an accelerated basis. We wish to thank our shareholders, stakeholders and lenders for their support through 2020, as well as Premier Kenney for his encouragement as we build towards Alberta’s economic recovery."

Estimated Future Production

In addition to production from the 5-21 well, Halo estimates an incremental 1,193 Boe/d (538 Bbls/d) of Montney productive capacity as illustrated in the table below:

Q4 Development & Montney Inventory

Prior to the drilling of the 5-21 well, Halo had 32 booked locations in addition to 350 contingent/prospective locations in the Montney.

The initial 5-21 results have further validated the Company’s Montney inventory. Fourth quarter capital spending requirements for Halo’s two well development program will be met by cash flow from operations, the Company’s $10.7 million term loan, and $3.4 million of potential warrant proceeds.

In addition to the Company’s 61.25 net sections of Montney acreage, Halo has another 37 net sections of contiguous prospective acreage in the Duvernay.