Trilogy Energy Corp. provides an update on recent drilling and completion results from its first horizontal well targeting the Devonian Duvernay formation.

In the Kaybob area of Alberta, Canada, Trilogy has participated in the drilling and completion of its first exploration horizontal well targeting the Devonian Duvernay shale formation under a previously announced joint venture with two industry partners, pursuant to which each partner has a 33.3 percent working interest in 27 gross sections of land.

The exploratory well, located at 00/15-33-060-20W5, was drilled and cased over 42 days at a cost of $4.0 million. The horizontal lateral was 1,787 metres; this was 500 metres longer than originally planned and would have allowed for a total of 13 frac stages. During the completion of the well, six stages were fractured over a time interval of 10 days. Each stage was fractured with approximately 100 tonnes of sand and 1,500 cubic metres of slick water. While attempting to fracture the seventh stage, it is believed that a rupture in the line occurred at the heal portion of the horizontal leg, preventing the fracture of the remaining stages. It was decided to flow test the well with the six stimulated stages while determining the feasibility of fracturing the remaining stages. Tubing and recorders were run and the well has flowed on test starting September 11, 2010. Prior to the flow test, the well flowed on clean-up for a total of 140 hours.

After three days on test, the well is currently producing approximately 2.1 MMcf per day of sweet natural gas and 56° API condensate. The gas is liquids rich and is expected to yield total liquids of approximately 75 barrels per MMcf of raw gas including free condensate.

After completing the flow test, the well will be shut-in, allowing for build-up. Bottom hole pressure is expected to be approximately 50 MPa. Although completion operations were suspended part way through the process, it is estimated that the well could have been completed with a 13-stage multi frac for approximately $3.0 million, without any operational difficulties. As a result, total drilling and completion costs would be approximately $7.0 million.

Trilogy is encouraged by the results from the first horizontal Duvernay shale well and particularly the high liquids content given the premium in pricing for natural gas liquids. Trilogy expects to participate in one or two more wells targeting the Duvernay shale formation during the balance of 2010. Trilogy currently owns 144,569 gross acres and 125,810 net acres (226 gross sections and 197 net sections) of land with Duvernay rights at Kaybob and surrounding areas.

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