TWO Well Drilling Program Successfully Completed / Both HM-5 Well and HM-12 Well, Reaching Both Target Zones at the Witter Field Oil and Gas Discovery IN Central California ____________________________________________________________________________________
ARCTIC HUNTER ENERGY INC.
c/o Suite 1200 - 750 West Pender Street ∙ Vancouver ∙ British Columbia ∙ V6C 2T8
Telephone: (604) 681-3131
NEWS RELEASE
December 11, 2018 TSX-V Trading Symbol: AHU
______________________________________________________________________________________
TWO WELL DRILLING PROGRAM SUCCESSFULLY COMPLETED / BOTH HM-5 WELL
AND HM-12 WELL, REACHING BOTH TARGET ZONES AT THE WITTER FIELD OIL AND
GAS DISCOVERY IN CENTRAL CALIFORNIA
____________________________________________________________________________________
VANCOUVER, BC - Arctic Hunter Energy Inc. (TSXV: AHU) (“Arctic Hunter ”) or the
“Company”) announces that the two well drilling program has now been successfully completed having
reached the target zones a t the new ly discovered light sweet oil target in the Witter F ield oil & gas
discovery. The Company has been notified by Temblor Petroleum that drilling of this second directional
well with a vertical completion, has now been successfully completed and the Paul Graham Drill Rig #
6 has been rigged-down and is expected to be off location at Witter Field shortly.
Temblor has now successfully completed drilling and casing , logging and finalizing the com pletion of
the second successfully drilled HM -12 well. Preliminary Log data provided to the C ompany from
Halliburton indicate another productive oil and gas hydrocarbon -bearing zone exists, and is seismically
defined, similar in size and analogous to the other two producing light sweet oil and gas wells, KCDL -2
and the HM-3, and the newly drilled HM-5 discovery wells, recently drilled at the Witter Field oil & gas
discovery. The new HM -12 well is now being fully completed, wi th subsequent logging data, and
interpretation analysis now being received by Temblor’s management team. Once the HM-12 has been
fully completed, both wells will be brought online, whereby well flow testing will begin concurrently,
on both the newly drilled HM-5 well and the HM-12 well. The results of the flow testing on the two
wells will be released when received by the Company. Both newly drilled wells HM-5 and HM-12, are
expected to be brought online with the Witter Field oil and gas production facilit y operations sometime
early in the new year.
WITTER FIELD OIL & GAS DISCOVERY / FACILITY AND PIPELINE
The Witter Field Oil & Gas Facility and pipeline is now completed, fully automated, tied in and now
fully operational. The facility includes two 2,200 barrel oil tanks with a production capacity of up to
2,000 barrels a day, a fully operational gas pipeline, and a natural gas processing facility. The Company
is currently shipping premium light sweet crude oil with a 38 % API combined with high quality gas to
the local California markets and receivi ng a cash premium for the oil. The high BTU content of the
Witter field gas (1265 BTU), required the construction of a new state of the art, gas separation
processing facility to remove natural gas liquids and re duce the BTU content of the gas from 1280 to
1080 for integration and input into California’s Pacific Gas & Electric (PG&E) gas system. This gas
processing facility is located 7 miles from the Witter field discovery at the Helm Station.”
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The Temblor/Witter Field project is situated in the San Joaquin Valley, in Central California and was
drilled and discovered by Temblor Petroleum and its working interest partners in 2015. Since its
discovery Temblor and its partners have invested significant capital in developing a fully completed
production facility and gas pipeline with liquid processing facilities. The Witter Field project is now
fully commissioned and has begun full commercial oil & gas production. In addition to the development
of the new wells and the newly completed processing facilities, Temblor has received a conditional use
permit from Fresno County for the drilling and development of 2 other wells and expanded facilities to
accommodate the full development and maximization of the field , of whi ch drilling has just been
completed in early December . Development and expansion of the discovery field is expected to
continue for many years. The well was drilled and completed in 2015. The current operator, Te mblor
Petroleum LLC has now completed its lease obligations to drill an additional 2 deep vertical wells this
year and integrate the new oil and gas production to the newly installed facilities o peration which can
handle over 2,000 BOPD of light sweet oil. Additional drilling and exploration growth activity has been
planned for the project in 2018-2025, with its working interest partners.
The Witter Field Oil & Gas transaction (see Company news release dated September 18, 2018)
represents the Company’s initial diversification into the United State s and the California oil and gas
resource sector by acquiring and securing monthly light oil production revenue and allowing the
Company to access advanced oil exploration and drilling and revenue opportunities. This strategic
acquisition of additional revenue producing resource assets will also allow the Company to access a
wide portfolio of oil exploration opportunities situated in this oil region. The Temblor/Witter Field Oil
project will also help to compliment the Company’s existing heavy oil productio n in Alberta and
Saskatchewan and provides the Company with reputable American working interest partners seasoned in
light oil & gas production, which will allow the Company access to future expansion opportunities in the
oil and natural gas resource sector in this region of California.
THE “TORRI” – OIL & GAS TERM OVERRIDING ROYALTY INTEREST
The TORRI is a non- operating overriding royalty interest that does not bear production expenses and is
created out of and burdening leasehold working interest in t he Witter Field Leases. The TORRI has a
limited term which commences at the effective time and automatically terminates and ends on that date
when the purchaser has received the purchaser’s proportionate share of oil and gas produced from the
Leases attributable to a portion of Temblor’s working interest therein. The transaction has no up- front
capital requirements and the production cash flow is expected to be immediately accretive to earnings
upon the effective date.
The Arctic Hunter light Oil & Gas tra nsaction (see Company news release dated September 18, 2018),
“The Torri” represents the Company’s initial diversification into the United States and the California oil
and gas resource sector by acquiring and securing monthly light oil production revenue and allowing the
Company to access advanced oil exploration and drilling and revenue opportunities. This strategic
acquisition of additional revenue producing resource assets will also allow the Company to access a
wide portfolio of oil exploration opport unities situated in this oil region. The Temblor/Witter Field Oil
project will also help to compliment the Company’s existing heavy oil production and cash flow, in
Alberta and Saskatchewan and provides the Company with reputable American working interest
partners seasoned in light oil & gas production, which will allow the Company access to future
expansion opportunities in the oil and natural gas resource sector in this region of central California.
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NATIONAL INSTRUMENT NI 51-101 OIL & GAS RESERVE REPORT –COMPLETED
The Company has completed a comprehensive NI 51- 101 Oil & Gas Reserve Report prepared by
Petrotech Engineering Ltd., for the Witter Field Oil & Gas discovery situated in the San Joaquin Valley,
California. Pursuant to the Royalty purchase Agreement, the Company will acquire 4,250 barrels of oil
and 18,750 mcf of gas from interests in oil and gas situated in the San Joaquin Valley, i n central
California for the purchase price of 2,249,100 shares of Arctic Hunter at a deemed price of $0.10 ce nts
per share.
ABOUT ARCTIC HUNTER ENERGY
The Company is a Canadian Oil & Gas exploration and development company that identifies, and
finances the acquisition, exploration and development of oil and gas assets primarily situated in Western
Canada. The Company is a junior heavy oil producer in the greater Lloydminster area of Alberta &
Saskatchewan. The Company is constantly reviewing future production and exploration opportunities
and selective property acquisitions and identifying low risk exploration drilling opportunities situated in
Canada, the United States and abroad. The Company has qualified management and has an Oil & Gas
team of professionals seasoned in production, field exploration and drilling. The Company has the
necessary manpower in place to develop its natural resource properties and manage its production
properties. The Company is committed to minimizing risk through the selective acquisition, exploration
and development of petroleum and natural gas resource assets.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Tim Coupland, President and CEO
Arctic Hunter Energy Inc.
Tel: (604) 681-3131
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the
Policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this
release.