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Norstra Energy Corp. (NORX) First Well In Montana Bakken Now In Permitting Phase, Casing Should Set By July 18th

|Includes: Norstra Energy, Inc. (NORX)

Norstra Energy reported today that they are all set to begin permitting and casing on the first well in their approximately 18k-acre block South Sun River Prospect, an over-pressure Bakken shale play in the heart of the Montana Bakken Fairway, Lewis & Clark County.

Surveying now complete, NORX is in the permitting phase, with anticipation running high that we will see the permit come through during the interval from around July 1st to the 3rd. Excavation of the drill site is currently slated to commence after the July 4th holiday and sometime before the 11th, with the casing following shortly thereafter based on rig access, but with a tentative endpoint of the 18th.

President and CEO of NORX, Glen Landry, underscored the successful proximal developments by majors like ARCO and Shell which have pierced nice Bakken sections here of striking similarity to Williston Basin targets. Landry further emphasized the potential of the area by pointing to the relevant seismic data, which offers us a clear picture of a contiguous Bakken thrust sheet that is not broken by any faults.

This area to the west of Great Falls is the prime southern Bakken territory on the Rocky Mountain Overthrust Belt's leading edge (north of the Sappington Formation area in southwestern MT), where many players, especially majors like ARCO and Shell, have put in extensive infrastructure targeting average depths of around 8.8k feet. Thankfully, the abundance of such high-fidelity neighbor data has allowed NORX to formulate a very clear model for the South Sun River Prospect area, deriving reserve estimates directly from well log data on the adjacent Shell-Krone #31-32 to the northeast and ARCO-Steinbach #1 to the west.

The new well, dubbed the 13-11 Milford Colony, was carefully chosen for optimum target section thickness potential and likely porosity. Dr. David Lopez's analysis of the extant data has been absolutely instrumental in this process, and he has pegged the unproven recoverable reserves within the immediate lease block around the 13-11 Milford Colony at some 45M bbls of original oil in place.

These estimates were calculated by taking the sonic log porosity data from the Steinbach, which has the thinnest section, as a baseline and the much thicker section/higher porosity of the Krone (easily higher than 12% according to neutron log data), as an upper end. The exceptional porosity of the nearby Krone and relatively safe bet that reservoir quality will remain constant across the Bakken, puts anticipated reserve estimates per section at around 11.3M bbls, with section reservoir slices in the neighborhood of 19 feet. Estimates here are also based on the assumption that the middle member is to be completed as the oil reservoir rock and that the low water saturation will lead to high-return volumes.

Some tremendous potential here according to Landry and the projections offered by Dr. Lopez, based on his analysis of all available data, firmly reinforce this view.

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