Wednesday, 16 September 2015

Virtus Oil and Gas Encounters Oil Shows at Lone Pine 34-11-5 Test Well - 16/09/2015

Virtus Oil and Gas Encounters Oil Shows at Lone Pine 34-11-5 Test Well

Company to Evaluate Well Findings, Protect the Wellbore, and Plan its Next Well

Virtus Oil and Gas Corporation (OTCBB: VOIL) ("Virtus" or "the Company") is pleased to announce it has encountered oil shows after penetrating the 1st Navajo Formation while drilling the Lone Pine 34-11-5 test well to a final depth of 5,362 feet.

Mud log with oil shows from the Virtus Lone Pine 34-11-5 test well.
Over the last few weeks of drilling, the Company has discovered 200 feet of oil traces in the Navajo Formation that were consistent with Virtus' seismic interpretations done in the last year. Based on the initial data collected from oil traces, log files and mud logs, the Company is excited with the findings from this first pilot (or Test) well.

Following the results acquired to date at the Virtus Lone Pine 34-11-5 test well, the Company will now commence the evaluation process of all data sources and once complete will move forward with the next stage of the drilling program once all expert opinions are gathered.

Mike Roberts, Engineer at Virtus, said: "Based upon geologic samples and the formation tops encountered, a decision was made to drill the well shallower than originally planned. During the course of drilling the drill bit continued to deviate and build angle more than expected due to a fault in the subsurface. We decided it was better to drill a shallower pilot well and identify all potential formation tops and correlate this with the seismic the Company has purchased and interpreted in 2014. The data acquired from this test well is valuable and it is encouraging that oil traces were discovered at the Virtus Lone Pine confirming that is was not a dry well."

Rupert Ireland, CEO of Virtus, said: "The initial test well at Virtus Lone Pine has gone to plan and we were most encouraged to discover oil traces for over 200 feet. We now have a much greater understanding of this complex thrust area and are confident of what we have to do when we drill our second well later this year or early part of next year. We now know where the fault line is and that the Kaibab Limestone is much shallower than expected meaning we won't have to drill the next well to 12,000 feet. The area of interest, which will be targeted with the second well, has been re-evaluated and determined by geologic analysis to be close by and within a few hundred feet, but is still a small distance in another direction from the surface location. The results from this test give us confidence to move forward at the Parowan Project. Energy Drilling, and Mike Roberts, our Company Engineer, did a superb job in executing the company's mission in this pilot well. Gary Smith, Owner of Energy Drilling, offered the best value bid with his Rig 8 and we look forward to working with him again on future projects. The second well, which will not be a science pilot well, but more an attempt for production, will be ably supported by directional drilling tools that can handle the high angle area zones and navigate the fault lines more precisely."  

Brett A. Murray, COO of Virtus, said: "We are excited to find traces of oil and also to see the large buildup of pressure pushing our drill bit directionally before we pulled back and entered the second Navajo formation. The difficulty in this prospect has been the well control with very few wells penetrating the formations in this area and knowing we had various faults as shown on our seismic. To keep the integrity of the well bore intact, VOIL has added temporary plugs to the Virtus Lone Pine Drilling hole on Saturday 12th September and the wellhead will have a blind flange installed on the 11 x 3000 psi connection which will suffice for a secure temporary abandonment status until operations are resumed. The deepening of this well is an viable option but the scientist will confirm if the wellbore was on track to penetrate the best production zones due to lack of directional bit."

Ryan Cox, Geologist of RPM Consulting who has been one half of the team of On Site Geologists working on behalf of Virtus Oil and Gas at Virtus Lone Pine along with fellow Geologist and President of RPM,  Joseph Large, believe the deeper Kaibab Limestone, the target of the second well, may have greater oil potential than the shallower Navajo.

Cox said: "From the depth of 4,470 feet to 4,670 feet we encountered very trace evidence of hydrocarbons immediately upon entering the Navajo Sandstone.  With a proper cap rock, the Navajo has the potential to be a highly productive reservoir that rivals Middle Eastern sands.  We have much higher hopes of the older Kaibab Limestone trapping hydrocarbons as the permeability is less than the Navajo Sandstone and based on seismic data appears to be less affected by the younger fault system."

Virtus Oil and Gas will now meet with RPM and Gustavson Associates and compare their Geological Findings with the Gustavson Report of October 2014 and Seismic Interpretations prepared by VOIL Geologist Dr. Bob Benson.

Ireland concluded: "This has been an exciting 12 months for Virtus Oil and Gas, during which time the company has exited being a shell status company, to now being a Public Oil and Gas Exploration and Operating Company," Ireland said. "We look forward to taking the next steps for progressing our Parowan Project toward commerciality."

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