Bowood Energy Inc. provides operational update on current activity in the southern Alberta Bakken Fairway.

Blood/Kipp Exploration well at 8- 30-8-23 W4

Bowood report that the Company's second Alberta Bakken test well located at Kipp, started production in December 2011. This well is located on the Blood First Nation Reserve. We have yet to establish a stabilized production rate due to the high pressure, multiphase influx of oil, water, and gas which has hampered pump performance during this early stage of production. The Company expects these issues are now largely resolved as the well continues to clean up and expects that production will start to increase with better pumping efficiency. The following is a summary of Kipp well operations to date:

1. After fracture stimulation (which occurred from Oct 25th to 29th, 2011), and subsequent flow back of completion fluid, the well was shut in for three weeks to record a static bottom hole pressure. The pressure data and the extrapolated pressure gradient confirm that the formation is over-pressured as expected.
2. Despite the fact that the early production operations at Kipp have been delayed, between the post frac clean up, the initial equipping operation and the first two weeks of intermittent production the well has recovered over 5,000 bbls of light, oil and approximately 50% of injected load water.
3. A comparison of public data on industry wells indicates that based on early cumulative production, the Kipp well appears to have the potential to be a one of the better wells in the play to date.

Spring Coulee Exploration well at 2-36-3-23 W4

At Spring Coulee, the Company's first Alberta Bakken test well has been on production for approximately three months. This exploration well confirmed two important criteria in establishing commercial unconventional oil production in the area. The first is that the area is over pressured, and the second is that the area is optimally located for peak oil generation, based on core results.

The Spring Coulee well has now produced approximately 2,500 bbls of oil since it was fracture stimulated and approximately 60% of injected load water has been recovered. The Company believes that the modest inflow is attributable to the inability to effectively fracture stimulate the well due to mechanical difficulties encountered in the wellbore during completion operations coupled with the low permeability of the formation. Since the Spring Coulee well encountered the light oil and over-pressured part of the fairway, the next steps to establishing commerciality at Spring Coulee will be to determine optimal stratigraphic placement of the horizontal well path in the multiple formations that make up the Bakken Petroleum System, and to establish an effective fracture stimulation program. The Company continues to believe that this area of the fairway is highly prospective for both the Alberta Bakken and the Second White Specks oil plays.

Tags: Bowood Energy